The production and sales of new energy vehicles have increased significantly, the lithium battery industry chain continues to be hot, and the news of power battery expansion continues. Entering 2022, the expansion of power battery production capacity, the story of battery manufacturers and vehicle companies is still playing.
Recently, the securities times · e company reporter visited the Ningde times Shanghai battery module base, the base has begun production, and Tesla Shanghai gigafactory and the base is only 3 kilometers away.
(Photo: Tesla Shanghai Gigafactory)
"The current power battery enterprises are indeed bound to the vehicle enterprises, and the logic of the production of the nearest vehicle enterprises is still continuing, which can ensure the effective supply and production capacity of the battery, and the deep binding is an inevitable trend." Cui Dongshu, secretary general of the National Passenger Vehicle Market Information Joint Association, said in an interview with the Securities Times E Company reporter.
The "binding" between power battery manufacturers and vehicle companies reflects the game of discourse power between the two sides. On the one hand, the surge in downstream demand is transmitted upwards, and power battery companies must choose to expand production in order to seize more market share, on the other hand, expansion also helps vehicle companies to lock production capacity. In addition, in order to gain a greater voice in the field of power batteries, power battery manufacturers and car companies have also opened a mode of joint ventures and equity investment to ensure production capacity.
The battery module base has begun to supply
Shanghai Free Trade Zone Lingang New Area gathered a group of new energy vehicle industry chain enterprises, along the Lianggang Avenue drive forward, you can see a large gray and white tone of the exterior wall and "CATL" blue logo, Ningde times Shanghai battery module base is located here.
(Photo: Ningde Times Shanghai Battery Module Base Entrance)
Recently, the Securities Times · e company reporter visited the Ningde times Shanghai battery module base, the base door hung "Ruiting Times (Shanghai) New Energy Technology Co., Ltd." words, from time to time there are trucks driving in, uniformed employees continue to enter the factory area.
● According to the enterprise investigation information, Ruiting Times (Shanghai) New Energy Technology Co., Ltd. (hereinafter referred to as "Ruiting Times") was established on May 24, 2021, with a registered capital of 500 million yuan and 100% controlled by CATL. Ruiting Times is mainly engaged in new energy technology, automotive technology in the field of technical services, etc., in July 2021, Ruiting Times business scope changed, adding battery manufacturing, battery sales, auto parts research and development, etc.
The reporter saw in the Ruiting era that there were several 5-story buildings distributed in the factory area, some wood was stacked in the open space next to the building, and there were several large hydrogen production equipment next to the parking lot. "The plant here is mainly to make battery modules, install batteries on modules, and battery production is not on this side." An employee of Ruiting Times told e Company reporters that he came to work at the Shanghai battery module base in September last year.
(Photo: CATL Shanghai Battery Module Base)
A staff member wearing yellow construction clothing told reporters that there are eight factories here, which have entered the production state, "We are here to do environmental protection projects, and we have been coming in for several days." In addition, some staff who claimed to be suppliers of CATL said that they had entered the base to work for more than a month, mainly to make equipment.
(Photo: Outside the Shanghai Battery Module Base of CATL Times)
"Our factory building has not yet been built, it is rented here to meet Tesla's needs and supply lithium iron phosphate batteries." An employee of Ningde Times, who was deployed from Fujian to the Shanghai base, said, "The new battery factory will be built next to Tesla's Shanghai super factory, just moved the ground, and the specific location is not yet visible." It is worth noting that the Ruiting era is only 3 kilometers away from Tesla's Shanghai Gigafactory.
In February 2020, CATL signed an agreement with Tesla to supply lithium-ion power battery products to Tesla from July 2020 to June 2022. In June 2021, the cooperation between the two sides was further extended, and CATL will continue to supply Tesla from January 2022 to December 2025.
It is understood that the Ningde era last year in Lingang inspection site, Lingang Group set up a major project promotion team, to find a suitable address of the ready-made plant, the relevant standards in line with the requirements of the Ningde era, just need to do some internal decoration and small-scale transformation. On December 20 last year, the Shanghai Municipal Commission of Economy and Information Technology revealed that the Shanghai Lingang battery module production base of CATL will be put into operation in early 2022.
The CATL era accelerated its layout in Shanghai
Zhang Xiang, an analyst in the automotive industry, said in an interview with e-company reporters that the location of the Ningde Times Battery Module Base in Lingang is mainly to quickly supply Tesla at a lower cost. "Tesla Shanghai Gigafactory delivered nearly 500,000 vehicles last year, the amount is very large, if the battery module base is not supervised in Lingang, the transport cost of the battery alone is very high, and the battery transportation cycle is also relatively long."
In addition to the production of the battery module base, the news of ningde times building a factory in Shanghai has also attracted market attention. At the beginning of June last year, there were market rumors that CATL was negotiating with the Shanghai government to build a new battery factory with an annual output of 80GWh cells in Shanghai, but it was not clear when a final agreement would be reached. At that time, for this news, CATL said it would not comment.
According to the employees of CATL times revealed to reporters, the new factory of CATL times is located near Tesla's Shanghai gigafactory. E company reporter visited and found that there are many construction sites around Tesla's Shanghai gigafactory, but it has not yet found signs of construction in the Ningde era factory nearby.
One observable fact is that the Ningde era was increasingly closely linked to Shanghai. On August 18 last year, CATL signed a strategic cooperation framework agreement with the Shanghai Municipal Government in Shanghai. It is understood that CATL will land in Shanghai global innovation center and international functional headquarters, future energy research institute, high-end manufacturing base and other related projects.
Among them, the high-end manufacturing base will rely on the latest production and manufacturing technology of the Ningde era to create a green and efficient intelligent factory in the Lingang New Area. At the same time, CATL will also promote the demonstration and application of cutting-edge technologies in the field of electrification and new energy storage in Shanghai in the future, helping Shanghai to accelerate the implementation of the work goal of "carbon neutrality and carbon peaking".
● Looking at the official website of CATL Times, the company's footprint in 2021 is mainly distributed in Shanghai, including the layout of the Innovation Center, the Future Energy Research Institute and the Lingang Base in Shanghai, as well as the joint construction of the Future Technology College with Shanghai Jiaotong University. On January 8 this year, the CATL Future Energy Research Institute officially entered the Minhang District of Shanghai. The Future Energy Research Institute will cooperate with Shanghai Jiao Tong University to lay out a number of forward-looking technologies in the field of new energy, build a global future energy innovation center in the long run, and help Shanghai build a future energy ecosystem.
"Cataline Times' layout of high-end manufacturing project bases in Shanghai has considered being closer to the Tesla factory to facilitate timely communication with customers." In addition, it can also absorb talents in the new energy industry chain near the Yangtze River Delta in Shanghai. An investor in the Shanghai lithium battery industry told reporters that Shanghai introduced Tesla to build a factory, relying on SAIC, Tesla and other vehicle companies, driving the development and improvement of the new energy vehicle industry chain. According to the "Shanghai Implementation Plan for Accelerating the Development of the New Energy Vehicle Industry (2021-2025)", by 2025, the annual output of local new energy vehicles will exceed 1.2 million; the output value of new energy vehicles will exceed 350 billion yuan; and the research and development and manufacturing of key components such as power batteries will reach the international leading level.
Battery manufacturers and car companies
The game of discourse power
According to the data of the Association, the total sales of new energy vehicles in 2021 reached 3.521 million units, an increase of nearly 160% year-on-year. Huge downstream demand has driven the supply of upstream enterprises in the industrial chain to increase significantly. As one of the most core components of new energy vehicles, the loading of power batteries has also increased significantly.
● According to the data released by the China Automotive Power Battery Industry Alliance a few days ago, the output of mainland power batteries in 2021 will total 219.7GWh, an increase of 163.4% year-on-year. Among them, the production of ternary batteries accumulated 93.9GWh, accounting for 42.7% of the total output, an increase of 93.6% year-on-year; the output of lithium iron phosphate batteries accumulated 125.4GWh, accounting for 57.1% of the total output, an increase of 262.9% year-on-year. Last year, the loading volume of continental power batteries accumulated 154.5GWh, an increase of 142.8% year-on-year.
At the same time, the price of battery raw materials has risen, and the demand for power batteries in main engine factories has also continued to rise. "Putting into operation at the Shanghai base of the Ningde era will reduce the transportation cost of some batteries, so that the price of batteries will not rise so quickly, which is a good thing for both sides." Mo Ke, founder of True Lithium Research, said in an interview with e company reporters that this move in the Ningde era is conducive to consolidating large customers and binding relevant production capacity to large customers. "This needs to be done when there is a big explosion in demand for electric vehicles. Automakers are looking for a guarantee of battery supply, and Tesla's demand is very large, and this practice in the Ningde era is worth it. Mercure said.
The choice of power battery manufacturers to build factories near car companies is also the result of multi-party weighing. "In general, battery manufacturers will not build factories next to each OEM that cooperates with it, and only if the amount of cooperation is large enough, it will be cost-effective to build a factory." If the amount is not large enough to achieve the economies of scale of the battery factory, the investment in building the battery factory may be difficult to recover. Zhang Xiang believes that ningde era to build a base or factory near Tesla's super factory can ensure Tesla's battery supply, so that Tesla is free from the threat of battery shortage risk. On the other hand, it is convenient for timely communication, and try to avoid delays in communication that will affect Tesla's production progress.
The "binding" between power battery manufacturers and car companies is more like a game of discourse. In order to gain a greater voice in the field of power batteries, power battery manufacturers and car companies have also opened a model to ensure production capacity such as joint ventures and equity participation.
As early as 2017, SAIC Motor and CATL jointly funded the establishment of two joint ventures, TIME SAIC Power Battery Co., Ltd. and SAIC Times Power Battery System Co., Ltd. This model of deep binding between vehicle companies and battery companies has gradually become popular in recent years. A number of car companies have established similar joint ventures with CATL.
In November last year, Sunwoda announced that its subsidiary Sunwoda Automotive Battery and Wuling Industry signed a "Letter of Intent for Joint Venture Cooperation", which is a holding subsidiary of Wuling Automobile, and the two sides intend to jointly invest in the establishment of a joint venture covering new energy vehicle power battery systems in Liuzhou, Guangxi. Sunwoda said that the signing of the letter of intent for cooperation means that the company's customer base in the automotive power battery business has been further expanded, and the business scale and industry status of automotive power batteries will be further improved in the future.
A recent example is the establishment of a power battery joint venture between BYD and FawC. Enterprise investigation shows that recently, FAW Fordy has been formally established, the registered capital of 1 billion yuan, the scope of business includes the development, production, sales of power batteries and battery systems, etc., the company by BYD's wholly-owned subsidiary Fordi Industrial Co., Ltd., China FAW Group Co., Ltd. wholly-owned subsidiary FAW Equity Investment (Tianjin) Co., Ltd. jointly held shares, accounting for 51% and 49% of the shares respectively.
Battery manufacturers multi-means
Respond to rising raw material prices
In the context of the "battery shortage" restricting the production capacity of car companies, the game between power battery manufacturers and car companies continues.
"The increase in battery prices this year is mainly caused by the sharp rise in upstream raw materials. Compared with January last year, the battery cost increased by 30% to 50%, and the price increase of battery factories this year is inevitable, but the actual price increase for the main engine factory is not so large. A power battery industry investor told reporters that because some large battery factories have some long single layouts, and the battery factory will also digest the impact of price increases through technology, the overall price increase may not be too high. The second-line battery manufacturers have a relatively weak voice, and they will refer to the first-line battery manufacturers to a certain extent in terms of price increases.
"For some automakers who do not have a strong voice, if they want to bind the production capacity of first-line battery manufacturers, they may need to invest in the production lines of battery factories." Some battery bases are bound to the automaker, and the speed of battery capacity expansion depends to a certain extent on the speed of the automaker's investment, and the speed of the automaker's investment is slow, and the speed of battery price increases may be faster. The above-mentioned investor said.
It is worth mentioning that the power battery company itself is also ensuring the supply of raw materials through self-construction, joint ventures, mergers and acquisitions, etc., in response to the rise in raw material prices. In July 2021, Ewell Lithium Energy issued a number of announcements to acquire 28.125% of the equity of Jinkunlun Lithium, and at the same time established a joint venture with Jinkunlun Lithium to invest no more than 1.8 billion yuan in installments to build a project with an annual output of 30,000 tons of lithium carbonate and lithium hydroxide; 110 million yuan to acquire 5% of the equity of Dahua Chemical, which enjoys the mining rights of Dachaidan Salt Lake; and the company's controlling shareholder, Tibet Yiwei Holdings Co., Ltd., intends to acquire 29% of the equity of Dahua Chemical.
Ningde Times, BYD, Guoxuan Hi-Tech and other enterprises have also carried out in-depth layout in domestic lithium resources. Taking CATL as an example, in September 2021, CATL announced that it intends to invest in the construction of a new lithium battery production and manufacturing base (Yichun) project in Yichun, Jiangxi, and has signed a cooperation framework agreement with the local government of Jiangxi in July 2021. On January 13 this year, Sichuan Times New Energy Resources Co., Ltd., which is 100% controlled by CATL, was registered and established, and its business scope includes mineral processing, mineral washing and processing, metal ore sales, and new material technology research and development
"With the rapid increase in the penetration rate of electric vehicles, the demand for precious metals such as lithium, nickel and cobalt continues to be strong, and in the context of the need for a certain cycle to expand production, the price is expected to remain at a relatively high level, and the cyclicality is relatively weakened." The analysis of the Open Source Securities Research Report pointed out that on the one hand, investing in metal raw materials can facilitate enterprises and resource-based enterprises to have more voice when signing a long-term agreement, ensuring the supply of their own raw materials, and on the other hand, they can also enjoy the share of investment income as shareholders.
Lithium battery enterprises to expand the tide,
The tide of listings followed
The production and sales of new energy vehicles are high, the demand for power batteries has increased sharply, and major battery manufacturers are competing to expand production capacity. Data from the Lithium Battery Research Institute (GGII) predicts that by 2025, the global new energy vehicle market penetration rate will reach more than 25%, which will drive global power battery shipments to more than 1.55TWh.
● According to the incomplete statistics of GGII, in 2021, there will be 63 power battery investment and expansion projects (including fundraising projects), with a total investment of more than 621.8 billion yuan and a planned new production capacity of more than 2.5TWh. Overall, the expansion of a single base of power battery companies is almost at the level of tens of GWh, and the capacity planning of the head enterprise has risen to the level of 100 GWh.
Judging from the announced capacity deployment of CATL, its production capacity will reach 600-700GWh in 2025. China Innovation Airlines plans to have a production capacity of more than 500GWh during the 14th Five-Year Plan period; Honeycomb Energy plans to reach 600GWh by 2025; and Guoxuan Hi-Tech has a capacity planning target of 300GWh in 2025. In addition, according to the location of power battery expansion, Sichuan, Jiangsu, Anhui, Jiangxi and Hubei have become the key provincial capitals where power battery companies settle.
The "crazy" expansion action has also triggered market concerns about whether lithium batteries are overcapacity. In November last year, the Department of Electronic Information of the Ministry of Industry and Information Technology issued the "Lithium-ion Battery Industry Specification Conditions (2021 Version)" (Draft for Comments) and the "Lithium-ion Battery Industry Specification Announcement and Management Measures (2021 Version)" (Draft for Comments), which put forward relevant requirements for domestic power battery enterprises in terms of capacity expansion, product performance, process technology and enterprise management, and said that in the future, enterprises will be guided to reduce manufacturing projects that simply expand production capacity, strengthen technological innovation, improve product quality, and reduce production costs.
Market analysis, this move or the current domestic power battery large-scale expansion of the warning, to avoid battery companies to repeatedly build low-end production capacity, to avoid serious overcapacity. "After the expansion and landing, the overall power battery production capacity will be relatively abundant, but the high-quality production capacity is still in short supply." Investors in the Shanghai lithium battery industry told reporters that the power battery has very high requirements for overall performance, and some of the low-end production capacity including statistics may be invalid production capacity, which cannot meet the standard of delivery, and the market still needs high-quality production capacity overall.
Under the bustling expansion tide, some power battery companies have gone to the road of IPO. CITIC Securities recently disclosed that it signed a listing counseling agreement with Hive Energy and has filed a listing counseling record with the Jiangsu Securities Regulatory Bureau. The two parties plan to complete the preparation of the listing application documents by March this year.
In addition to Hive Energy, China Innovation Airlines has also reported listing news, and at present, China Innovation Airlines has submitted the "Approval of the Overseas Initial Public Offering of Shares of a Joint Stock Limited Company (Including Ordinary Shares, Preferred Shares and Other Stocks and Forms of Stock Derivation)". In addition, LG Energy is on the eve of an IPO, and the company will land on the Seoul Exchange on January 27 to raise $10.7 billion, which will be invested in capacity expansion and next-generation technology research and development. It can be seen that power battery companies need to continuously invest in research and development for technological upgrading to gain a competitive advantage. At the same time, the huge expansion of production capacity also requires a lot of financial support, and power battery companies may accelerate the landing on the capital market.
(Editor-in-charge: Zhang Qianye; Photo: Mei Shuang)
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