The global lithium battery is about to enter the post-patent era

This article is based on publicly available materials and is for informational purposes only and does not constitute any investment advice.

2021 is undoubtedly the year when the lithium battery industry chain breaks out from the upstream mine to the terminal new energy vehicle, and it may also be the first year to open the future to last 5 years of high prosperity to 2025:

According to the latest data released by the China Association of Automobile Manufacturers, china's new energy vehicle production and sales continued to increase sharply in November this year, but also hit a record high, while automobile production and sales fell by more than 9% year-on-year, but the production and sales of new energy vehicles reached 457,000 and 450,000 units, respectively, an increase of 1.3 times and 1.2 times. From January to November, the production and sales of new energy vehicles reached 3.023 million units and 2.990 million units, respectively, an increase of 1.7 times year-on-year.

Terminal hot sales naturally led to the rapid development of domestic lithium batteries, this year's 1-10 months of the world's installed capacity of the top ten list, China's battery manufacturers accounted for 6 places, respectively, Ningde times, BYD, AVIC lithium battery, Guoxuan hi-tech, vision AESC and hive energy, the market share accounted for up to 47.1%, and this market share is still increasing, next year or is expected to break through the 50% mark.

China's battery manufacturers have achieved excellent results, but it should be pointed out that with the gradual expiration of patents for lithium iron phosphate and ternary cathode, the global market or will face changes in the competitive landscape of the post-patent era.

01

Patent is the biggest bottleneck for domestic batteries to go to sea

It is gratifying that China's battery manufacturers have a leading position in the global overall market, but it needs to be clear that the reason behind the extremely high market share of China's battery manufacturers is more because China's new energy vehicle market is the world's largest, so the corresponding domestic battery manufacturers have also benefited, after all, China's new energy vehicle sales in addition to in 2020 due to the impact of the epidemic caused the proportion of global sales to fall to 41%, other years in the world's first, this year's 1-11 months cumulative sales accounted for more than 50%.

From the perspective of the international market, if the domestic situation is excluded, only look at the overseas market, South Korean companies LG Chemical and Panasonic and Samsung SDI and other battery manufacturers occupy a large market share. Wall Street Insight Research believes that in terms of overseas market expansion, China's battery manufacturers have been slow to exert force, and one of the main reasons may lie in patents.

Lithium battery industry major companies whether domestic or foreign for patents are quite important, foreign to see the power battery two giants LG new energy and SKI in the electric vehicle power battery patent litigation has been maintained for several years, the domestic Ningde era also because of the battery patent rights sued Tafil, Long Hua Technology in the United States to sue A123 System patent infringement and other cases, and the current mainstream lithium iron phosphate batteries and ternary lithium batteries are actually patent restrictions.

As early as May 2011, China's National Patent Reexamination Board made an invalid decision on overseas companies on the patent dispute of lithium iron phosphate batteries, and the judgment dispelled the concerns of China's battery manufacturers needing to pay high patent fees, laid the foundation for the growth and development of the domestic lithium iron phosphate industry, and also enabled China's lithium battery industry to develop rapidly in the next 10 years.

However, the domestic market is currently less affected by china's judgment of invalidity, but once the domestic enterprise lithium iron phosphate is exported, it will face patent litigation disputes.

02

Most of the patents will expire in the coming year

In terms of segmentation, the core patents of lithium iron phosphate include infrastructure, carbon coating and carbon reduction, all of which are in the hands of overseas companies and institutions.

Among them, the infrastructure was successfully applied for by the University of Texas in 1997, the carbon cladding was successfully applied for by the Quebec Hydropower Company in Canada in 2000, and the carbon reduction was successfully applied for by the British enterprise Valence in 2000. The core technology patents for ternary materials are mainly controlled by 3M and ANL (Argonne Laboratories in the United States), both of which applied for patents related to ternary materials in 2001.

Any enterprise that wants to engage in the production and sale of lithium iron phosphate and ternary cathode material products during the term of patent protection is required to pay them expensive patent fees, and if they do not want to pay fees, they can only wait until the expiration of their patent terms.

In fact, according to the time point of view, the statutory protection period of the invention patent is only 20 years from the filing date, and after the expiration date, the patent will be disclosed and can be used free of charge, so it seems that most of the patents will basically expire next year and the year after, which is one of the reasons why the world's major battery manufacturers have basically begun to announce their entry into lithium iron phosphate batteries this year.

The top five battery manufacturers in the world's power battery loading volume, Ningde Times, LG New Energy, Panasonic, BYD, SKI, and only Panasonic has not yet announced the development of lithium iron phosphate batteries (focusing on 4680 batteries), but it is reported that Quebec has extended its carbon coating patent to 2025, so some of the patent impact is still there.

03

In the post-patent era, China's battery manufacturers still have a leading position

However, once the patent is fully liberalized, China's battery manufacturers in addition to the need to maintain the domestic market advantage, after all, China's new energy vehicle market is still the world's largest market, overseas market will become the main direction of China's battery manufacturers, China's battery manufacturers will still have greater advantages.

First of all, China's battery industry chain is relatively complete, 70% of the world's battery production capacity and more than half of the production capacity of more than half of the four major materials are in China, whether it is the United States or Europe, in the short term, China's power battery industry competitiveness is difficult to be easily shaken;

Secondly, in terms of lithium iron phosphate, which is currently the most concerned, because new energy vehicles in overseas markets including Europe, the United States, South Korea and other markets have basically used ternary lithium batteries before, and even South Korea's energy storage is using ternary lithium batteries instead of lower-cost lithium iron phosphate batteries, so that terminal car companies and users do not pay enough attention to lithium iron phosphate;

Finally, LG New Energy, SKI these overseas leading battery manufacturers although they each have strong R & D capabilities and foundations, this year also began to study lithium iron phosphate batteries, but in general, these battery manufacturers on lithium iron phosphate battery research and development and planning time is still short, and limited by the patent problem of lithium iron phosphate, short-term production capacity is unable to come out quickly, the probability of rapid landing of lithium iron phosphate battery production line overseas in the future is low.

Therefore, China's battery manufacturers still have a certain leading position in the field of lithium iron phosphate batteries for a certain period of time. (Author: Wu You; Source: See Wisdom Research Pro)