In 2021, the domestic power battery installed volume increased by 142.8%: the Ningde era occupied half of the country

On January 12, the China Automotive Power Battery Industry Innovation Alliance released data showing that in 2021, the cumulative output of China's power batteries was 219.7GWh, an increase of 163.4% year-on-year; sales were 186.0GWh, an increase of 182.3%; and the loading volume was 154.5GWh, an increase of 142.8% year-on-year.

The rapid development of the power battery industry is mainly due to the growth of China's new energy automobile industry. According to data from the China Association of Automobile Manufacturers, in 2021, the production and sales of new energy vehicles in China reached 3.545 million units and 3.521 million units, respectively, an increase of 1.6 times year-on-year. Due to the strong correlation in the industrial chain, the growth rate of power battery production, sales and loading volume is comparable to the growth rate of new energy vehicles.

In terms of technology, due to the best-selling models of Tesla China, BYD, SAIC-GM-Wuling and other head enterprises, the rapid development of lithium iron phosphate batteries has been driven, and the market size has surpassed that of ternary lithium batteries.

In 2021, the loading capacity of lithium iron phosphate batteries was 79.8GWh, an increase of 227.4% year-on-year, accounting for 51.7% of the total installed vehicles; the loading capacity of ternary batteries was 74.3GWh, an increase of 91.3% year-on-year, accounting for 48.1% of the total installed vehicles. The two mainstream routes accounted for 99.8% of the total loaded vehicles.

Unlike traditional auto parts that mainly rely on multinational parts companies, China's power battery technology strength is in the world's leading position, and local enterprises have strong competitiveness. Among the top 10 companies in terms of domestic power battery loading volume in 2021, there are 9 Chinese companies. Among them, CATL, BYD, China Innovation Aviation (AVIC Lithium Battery) and Guoxuan Hi-Tech ranked in the top four, with market share of 52.1%, 16.2%, 5.9% and 5.2% respectively.

"China's power battery industry chain is complete, 70% of the world's battery production capacity is in China, and the product supply is global." Although the United States and Europe are making every effort to build a battery industry chain, and China's battery entry into the US market may also be hindered, but overall, the industrial competitiveness of China's power battery is difficult to shake for a considerable period of time. In December 2021, Ouyang Minggao, an academician of the Chinese Academy of Sciences and a professor at Tsinghua University, told the 21st Century Business Herald reporter.

When the expansion is in progress

Due to the development speed of the new energy automobile industry higher than expected, the industry is currently facing the problem of insufficient supply of domestic high-quality power batteries.

In 2021, the senior executives of a number of new energy vehicle companies said in interviews with the 21st Century Business Herald reporter at different times that they were facing different degrees of battery supply shortages.

"The battery supply tension began to appear in the second quarter of 2021, and this situation still exists and will continue for some time, mainly due to the fact that the head battery company is too popular." Everyone is scrambling for the battery of the Ningde era and needs to queue up. On January 13, a car company said in an interview with the 21st Century Business Herald reporter.

Not only the Ningde era, a number of second-tier battery companies are also facing the problem of tight production, and there is a considerable degree of gap in the battery in the industry.

Many people in the industry believe that the tight supply of high-quality power batteries may continue until 2025 when expressing their views in public.

Ouyang Minggao expects that the domestic power battery loading capacity will reach about 600GWh in 2025, and it will be between 1500-2000GWh in 2030.

In the next few years, domestic power batteries will show a higher demand growth trend. In 2021, a number of power batteries are actively expanding their production capacity to meet the expanding demand.

21st Century Business Herald reporter incomplete statistics, in 2021, including Ningde times, BYD, AVIC lithium battery, Yiwei lithium energy, Guoxuan hi-tech, hive energy, Fu energy and other first- and second-line power battery companies, planned new production capacity of more than 1000GWh.

The main new production capacity is mainly first- and second-tier enterprises, and the scale of investment has been expanded, and the amount of investment is tens of billions.

The leading enterprise Ningde Era, which is an enterprise with expansion projects, has also been favored by many local governments across the country, and they hope that ningde era will increase investment. In August last year, CATL launched a fixed increase of up to 58.2 billion yuan, planning a project with a new production capacity of 137GWh in one go. Judging from the current public information, by 2025, Ningde's production capacity will exceed 600GWh.

BYD registered four new Fordy battery companies in 2021, with a total of more than 75GWh of new capacity. ATD's production capacity reached 65GWh at the end of last year, and it is expected to exceed 90GWh by the end of this year, and the long-term planned production capacity will exceed 200GWh. However, due to the strong competitive relationship between car companies, BYD batteries are currently mainly supplied by BYD new energy vehicles, and the scale of battery supply is small, which is the main problem on the road of BYD battery development.

The pace of expansion of production capacity of second-tier battery companies such as AVIC Lithium Battery, Guoxuan Hi-Tech and Hive Energy has also been very large.

AVIC lithium battery capacity plan will exceed 500GWh by 2025 and is expected to achieve 1000GWh capacity in 2030; Honeycomb Energy's capacity plan for 2025 will be increased from 280GWh to 600GWh; Guoxuan Hi-Tech plans to increase its production capacity to 100GWh by the end of 2022, and plans to put into production beyond 50GWh.

The second echelon rises

From the perspective of the development pattern of China's power battery industry in 2021, the head concentration effect of the industry is more obvious.

According to the information released by the China Automotive Power Battery Industry Innovation Alliance, in 2021, a total of 58 power battery companies in China's new energy vehicle market will achieve car loading, a decrease of 13 compared with the same period last year. Among them, the top 3, top 5 and top 10 power battery companies accounted for 74.2%, 83.4% and 92.3% of the total installed vehicles, respectively.

The pattern of the first and second echelons of the entire industry has become more and more clear.

Specifically, the Ningde era occupies half of the industry, and the leading position is difficult to shake, followed by BYD. The NINGDE era took into account ternary and lithium iron phosphate in terms of battery routes, and released sodium-ion batteries in 2021, and BYD's focus was on blade batteries with lithium iron phosphate materials.

In the second echelon, local enterprises such as AVIC Lithium Battery, Guoxuan Hi-Tech, Hive Energy, Fu Neng Technology, Tafil, Sunwoda, Andywell Lithium Energy, as well as LG New Energy, which supplies some ternary batteries to Tesla China.

The second echelon has emerged a number of high-quality local enterprises, mainly due to the desire of car companies to refer to the parts supply system of the traditional automobile industry and expand their battery supplier system.

For example, in addition to the Ningde era, Xiaopeng Automobile has incorporated Ewell Lithium Energy and AVIC Lithium Battery into its battery supply system, the main battery supplier of GAC New Energy has switched from the Ningde era to AVIC lithium battery, and Volkswagen's battery supply partners in China include Ningde Era, Guoxuan Hi-Tech, and A123.

"Auto companies all want to have one supply and two supply, especially in the key components there are mutual checks and balances and mutual substitution, in case a large supplier falls, the second and third companies can immediately top it, and also prevent a monopoly on the automaker." On January 11, Gong Min, head of research at UBS's China automotive industry, said in an interview with 21st Century Business Herald.

Among several second-line battery companies, several local second-line battery companies have specialized technical routes. Among them, Guoxuan Hi-Tech's lithium iron phosphate technology is stronger, the German Volkswagen Group has become the company's largest shareholder, and Guoxuan Hi-Tech will enter the battery supply system of Volkswagen Group in the future. Fu Neng Technology has also received investment from Mercedes-Benz's parent company Daimler, and it is possible to enter the supply system of Mercedes-Benz in the future. Backed by large enterprises, it is an important basis for the future business development of the two companies.

Among several other second-tier battery companies, AVIC lithium batteries and hive energy are worth paying attention to.

In 2021, the installed volume of AVIC lithium batteries was 9.05GWh, an increase of 154.9% year-on-year, and the market share reached 5.9%, ranking third. The rise of AVIC lithium batteries is mainly due to GAC Aean, in addition to providing a certain imagination space for car companies such as Changan Automobile, Xiaopeng and Zero Run.

The main technical route of AVIC lithium battery is ternary battery, and lithium iron phosphate is less large. However, because the technical route of AVIC lithium battery is very similar to the Ningde era, it is also the key target of the Ningde era. In 2021, AVIC Lithium Battery was sued by CATL for patent issues, and the dispute between the two was also related to GAC Aeon shifting the focus of battery cooperation from NINGDE Era to AVIC Lithium Battery.

Hive Energy is a battery company incubated by Great Wall Motors, and in addition to supplying batteries to Great Wall Motors, it also cooperates with Dongfeng, Geely Automobile, Zero Run Automobile and other enterprises. Unlike the outside world, which often treats the view of "Fordy battery = BYD's battery", there is still a large gap between Hive Energy and Great Wall Motors, which is conducive to its customer development in China.

Despite the menacing second-tier battery companies, the leading position in the Ningde era is still very stable.

Gong Min believes that the 50% share of head enterprises (that is, the Ningde era) has been very stable in the past few years. Moreover, in the process, when they can't pick up, they give up some relatively low-end, cheap car companies to some small businesses. In this process, there are new car companies coming in, at the beginning or priority will choose the head of the battery company, and gradually there are some more cost-oriented, more cost-effective, some orders transferred out, but the whole process is dynamic.

"It's always possible to see some orders going out, but the overall share of the giant companies looks more stable than expected." Gong Min said.