The new energy vehicle market will break out again in 2021. According to data from the Association, the total sales of new energy vehicles in 2021 reached 3.521 million units, an increase of nearly 160% year-on-year. While sales are growing strongly, the penetration rate of new energy vehicles in the market is also increasing. From January to December 2021, the market penetration rate of new energy vehicles reached 14.8%.
Downstream demand is increasing, and the supply of upstream enterprises in the industrial chain is also increasing. For new energy vehicles, one of the most core components is the power battery. With the continuous improvement of the penetration rate of new energy vehicles, the demand for power batteries in OEMs is also rising.
Entering 2022, does the law of "power battery to get the world" still apply? We can see a hint in recent industry news.
The "expansion" race continues
Although the industry has made it clear that the sales of new energy vehicles continue to rise, its development speed has exceeded everyone's expectations. In 2021, the power battery industry has entered a new round of "expansion tide", including BYD, Ningde times, AVIC lithium battery, Guoxuan Hi-Tech and other power battery giants have announced that they will expand the scale of production capacity in the future. At the beginning of December last year, Hive Energy announced that it would expand its production capacity to 600GWh in 2025, aiming to directly double; Guoxuan Hi-Tech also announced that it would build or expand a power battery base, and it is expected that the production capacity will reach 100GWh by the end of 2022.
According to incomplete statistics, only a few head battery companies announced new production capacity in the next 5 years, which has reached 2000GWh. What is this concept? In 2021, the cumulative loading volume of continental power batteries was 154.5GWh, an increase of 142.8% year-on-year. The planned production capacity of the head enterprise in the next 5 years will exceed the domestic power battery installed volume by nearly 13 times this year!
Industry insiders expect that 2022 will be the "T era" of the global power battery market, that is, the planned production capacity will enter 1TWh (1024GWh), and the vast majority of production capacity will be concentrated in the Chinese market. Frenzied expansion is like a silent arms race.
OEMs joint venture or into a new model?
At present, there are not many host manufacturers with self-developed and self-produced power batteries in China. More representative are BYD's Fordy battery, Great Wall Group's Hive Energy and GAC Group's Juwan Technology Research Institute. Juwan Technology Research is currently in its infancy, the future will develop and produce GAC's graphene batteries; Honeycomb Energy is in the development stage, 2021 power battery loading capacity reached 3.22GWh, the market share of 2.1%; Fordi battery has been in a mature stage, 2021 power battery loading capacity reached 25.06GWh, accounting for 16.2%, second only to the industry giant Ningde era.
In order to gain a greater voice in the field of power batteries, those car companies that do not have self-research capabilities seem to be developing a new model of "expansion" - joint ventures. On January 15, FAW Group and Fordy established a joint venture, FAW Fordi New Energy Technology Co., Ltd., with BYD 51% and FAW Group 49%. In the future, the blade battery produced by this company will not only be equipped for BYD models, but also installed on some of FAW Hongqi's new energy models; in addition to geely's joint venture with Ningde Times, Yaoneng New Energy Co., Ltd., which was formed with Fu Neng Technology, has also landed in Ganzhou and is scheduled to be officially put into production in 2022.
Not only independent car companies, overseas car companies have also embarked on a new road of "joint venture" of power batteries. Honda and LG New Energy, Volkswagen and Bosch, Nissan and Envision, Porsche and BASF... Obviously, the joint venture between car companies and power battery companies and the participation in battery manufacturers have become a new direction and new model for car companies.
Is there overcapacity?
Some experts pointed out that the compound growth rate of new energy vehicles in the mainland for a longer period of time is about 30%. According to this ratio, this year is 3.5 million vehicles, next year is expected to be 5.2 million, and by 2025 there will be only about 9 million vehicles. If you infer according to the number of 9 million new energy vehicles, the total demand for power batteries is only about 600GWh.
Of course, we must also take into account the demand for power batteries in overseas markets. However, the European Union has issued relevant documents and policies, requiring car companies to reduce their dependence on Asian power batteries and achieve self-sufficiency. The joint venture between Volkswagen and Bosch was born for this, and they will serve battery factories across Europe and create a complete, localized supply chain for "Made in Europe" electric vehicles, including Volkswagen.
From this point of view, the production capacity of 2000GWh power batteries does seem to be a bit excessive, so battery manufacturers seem to be developing new models at the same time. CATL recently released EVOGO, a power exchange brand for end users, and the power exchange model of China's new energy market has changed from a single brand supported by Weilai to a standardized power exchange pattern dominated by head suppliers such as CATL.
From the perspective of the power exchange model, suppliers must produce more battery packs and battery packs to provide to the market for circulation. However, the circulation of 2000GWh of this power battery capacity is too large. Moreover, will there really be so many OEMs that support the power exchange mode?
Obviously, power battery companies have become the darling of capital, and the investment center of the new energy vehicle industry chain has gradually shifted from the downstream new power main engine factory to the middle and upper reaches of the battery supplier. The market strategy of attaching importance to the supply chain and expanding production capacity is correct, but we should look at it rationally to prevent blind expansion of production with hot heads. The product technology update iteration of the power battery is extremely fast, and we should invest capital in research and development to further improve the product performance of the power battery and accelerate overtaking on the global new energy vehicle track.
Every project with a huge investment and great profits will always have a hot head. For the "big cake" of the new energy automobile industry, we should return to rationality and not blindly get on the horse, otherwise we will embark on the old road of "leaping forward" in the real estate industry.