Who moved the earth on the head of the "King of Ning"?

Image source @ Visual China

Text | Photon Planet, author | Wen Yehao, Editor | Wu Xianzhi

After a wave of sharp declines, the Ningde era, the big brother of the global power battery industry, once changed the title of "Ning Wang" among shareholders from "Ning Wang" to "lack of morality era".

As the first power battery manufacturer in China to supply a joint venture, the rise of the Ningde era is largely due to the window period of each wave of policy dividends.

In March 2015, the relevant departments issued a "white list", the foreign investors occupying the domestic market became the background board, the factories built were either sold or shut down, and domestic battery companies took advantage of the new energy Dongfeng to regain the cake from foreign companies.

However, the enterprises that grow with the help of the "white list" are not only in the Ningde era, but also companies such as BYD and China Innovation Airlines (AVIC Lithium Battery). At this time, the battery energy density was included in the subsidy assessment standard, and the Ningde era ushered in the next window period.

During the period, CATL obtained a large number of orders with ternary lithium-powered batteries, surpassed Panasonic to become the first in market share, and gradually won the industrial chain of power batteries, establishing dual advantages in production capacity and price. Players who have laid out lithium iron phosphate batteries such as Zhongxin Airlines have faced a series of problems such as losses, restructuring, and technical route adjustments due to the relatively low energy density of the batteries.

Following the trend and eating up the dividends, the Ningde era finally sat on the top spot in the industry. However, lithium batteries have always been a rich mine, and various factors show that this situation of dominance is something that all parties do not want to see. As the dark war of the power battery industry begins, the pillars of the chair also seem to be shaking.

The crowd rises together

Players who covet the Ningde era have both old opponents and new troops.

Domestically, China Innovation Airlines, which is folded in the subsidy policy, has not been depressed, but has actively changed its production line and expanded its production capacity after the company's structural adjustment in the second half of 2018. In the same period, Great Wall Motors established a power battery company "Honeycomb Energy" to receive orders for the whole market.

Consumer battery old cannon Ewell Lithium Energy and Sunwoda are also rubbing their hands, pouring into the power battery track, relying on battery technology accumulation and large-scale manufacturing experience to quickly enter the game, and the installed capacity is increasing day by day.

In addition, foreign capital has also sharpened their knives and invested in expanding production in China in an attempt to grab the cake that was divided. According to industry insiders, the time for foreign investment to return to China is concentrated in 2019, and now the production capacity has been gradually released.

A number of enterprises are playing chicken blood, intending to divide the power battery plate occupied by the Ningde era.

The data shows that from January to November 2021, the market share of China Innovation Aviation climbed to 5.8%, ranking third among domestic power battery companies, and Honeycomb Energy has also squeezed into the top ten of domestic power battery installed capacity, and LG Chemical's market share even exceeded the Ningde era.

Apparently, players who have tasted the sweetness have accelerated their march.

An industry insider told Photon Planet: "At present, many manufacturers are expanding production, even if the production capacity under construction far exceeds the installed capacity, it will be expanded, and the production capacity advantage of the Ningde era will probably be filled in by the gradual release of production capacity." ”

Taking China Innovation Airlines as an example, its battery capacity plan by 2025 will exceed 500GWh. Also in 2025, Hive Energy set a capacity target of 600GWh. On the production capacity side, power battery manufacturers seem to be rolled up.

However, even if all the people and horses have gained a firm foothold, but limited by the size of the volume and customer channels, it is still unrealistic to overthrow King Ning overnight. As the inner volume intensifies, players caught in a scorching battle invariably play the "listing card".

In November 2021, Liu Jingyu, chairman of China Innovation Airlines, said that China Innovation Airlines has completed the shareholding system transformation and plans to land on the capital market. Previously, it was reported that in recent years, hive energy, which has been frantically financing and aggressively expanding production, is also actively seeking listing.

If the listing of second-tier battery factories is not enough to stir up storms, then the landing of heavy players in the capital market is enough to stir up the quagmire.

In December 2020, LG Chem also spun off LG New Energy, which will launch the largest IPO in South Korea's history, scheduled to be officially listed on the Korea Stock Exchange on January 27.

For the future, LG New Energy CEO Kwon Young-soo appears confident, saying that its orders are more, the customer base is wider, and the market share will exceed that of the Ningde era.

What Kwon Young-soo said is not out of thin air, from the perspective of factory distribution, LG has a layout in China, Europe and the United States, while the Cataline Era focuses on China. According to public information, there is no significant difference in production capacity between the two.

In the face of the covetousness of the great powers, the Ningde era was naturally defensive. According to an internal employee, the Ningde era is currently rushing production, the production line overtime has become the norm, not to mention, there are also employees in other departments who have been transferred to the production line, and the work pressure is huge.

Having said that, the Ningde era is still difficult to prevent the current situation of the cake being eaten, and one performance is that the gross profit margin of its power battery system products has slipped from 32.67% in the first half of 2018 to 23.00% in the first half of 2021. It is worth noting that this time node is on the eve of the "listing tide" of related enterprises.

Car companies draw salaries from the bottom of the cauldron

Under the combination of the crowd, the past cooperation objects of the Ningde era seem to be fleeing.

It is rumored that Zeng Yuqun, chairman of the Ningde times, had a big quarrel with He Xiaopeng over the introduction of China Innovation Airlines. In addition to winning Xiaopeng Automobile, China Innovation Airlines also replaced catalpa Times as the first supplier of GAC New Energy.

However, it is far more than just China Innovation Airlines that has leveraged the empire: BMW signed a contract with Ewell Lithium Energy, Weilai has reached a cooperative relationship with Weilan New Energy, and old customers such as Mercedes-Benz and Geely have built their own power battery factories. It is rumored that Tesla, Weilai, and Volkswagen also seem to have taken OND.

The logic behind this is actually very well understood, from the perspective of car companies, if there is an opportunity to support the second supplier, it will inevitably be shot, after all, the power battery is called the heart of the tram, and no one wants to be trapped in a single supplier. On the contrary, from the perspective of the Ningde era, it is natural to become the only supplier of car companies.

According to media reports, car companies get batteries from the Ningde era, in addition to paying the battery fee itself, they also need to prepay the deposit corresponding to the expected battery demand for 5-10 years in advance. In order to recover the deposit, car companies have to reach the purchase quota year by year according to the expected demand.

Obviously, in the field of power batteries where supply and demand are not balanced, the Ningde era enjoys an absolute right to speak. In order to ensure supply, car companies had to let the Ningde era bind demand and share the risk.

An anonymous person who worked in BYD's transmission department said that "a single supplier is neither safe nor in the interests of car companies, and the continuous extension of the industrial chain in the Ningde era also makes the downstream look creepy."

On the other hand, a number of car companies began to flee the Ningde era, which may also be related to the conflict between the demands of both sides.

At present, the new energy track is becoming increasingly crowded, and the car companies that fight in it often need to establish differentiated advantages with innovation. However, according to 36Kr, the Ningde era does not seem to be active in the face of the differentiated needs of car companies.

Taking Weilai as an example, it once wanted to cooperate with CATL to develop a 150KWh semi-solid-state battery pack solution, but CATL was unwilling to mobilize engineering resources for this purpose.

Subject to people, differentiation is difficult to find, and it is also natural for car companies to escape from the "King of Ning". From January to November 2021, the installed capacity of second-tier battery companies increased by about 69% year-on-year, and the market is changing.

However, at this stage, the so-called escape of car companies is mostly to seek a second way for themselves, and few car companies dare to directly break off relations with the Ningde era. Taking Xiaopeng as an example, its official statement that the cooperation with China Innovation Airlines is necessary to improve the parts supply chain and ensure supply and production.

In this regard, an industry insider said: "Leaving the Ningde era, it is difficult for car companies to ensure a stable battery supply, and even if it can be guaranteed, it is difficult to bypass patents." ”

It can be seen that the current Ningde era is still in place, and the production capacity advantages and technical barriers have shaped its moat, but whether it is strong or can it be long-lasting?

Variables of the technical route

At present, under the protection of the huge production capacity of the Ningde era, the so-called moat has not yet been tested, after all, a number of car companies are still in the battery robbery war, and the stable supply provided by the Ningde era is particularly critical.

However, as mentioned above, all players on the track are sparing no effort to expand production and prepare, and the so-called large-scale manufacturing capabilities of the Ningde era are bound to be diluted.

Once the supply and demand relationship is reversed, whether the former discourse power of the "King of Ning" can be retained can only be determined by technical barriers. If the technological advantages are weakened, it will be difficult for the Ningde era to stop the pace of car companies flocking to the second supplier.

Therefore, for the Ningde era, how deep the technical barriers are determines whether it will eventually become BOE or TSMC.

As we all know, there has always been a dispute over the technical route of lithium iron phosphate and ternary lithium in the field of power batteries. The advantage of lithium iron phosphate is high safety, the disadvantage is that the energy density is relatively low, and ternary lithium is the opposite.

Although the two technical routes of the Ningde era have a layout, but in the past rely on ternary lithium to hit the "Ning Wang", its ternary lithium battery technology accumulation is significantly deeper than lithium iron phosphate.

However, since the emergence of BYD blade batteries, the technical path seems to be turning to lithium iron phosphate.

Data from the China Automotive Power Battery Industry Innovation Alliance shows that in the first seven months of 2021, the output of lithium iron phosphate increased by 310.6% year-on-year, while the output of ternary batteries increased by only 148.2% year-on-year; in terms of installed capacity, lithium iron phosphate increased by 333.0% year-on-year, and ternary batteries rose by only 124.3%.

An industry insider believes: "With the rise in raw material prices and the decline of subsidy policies, the cost-effective advantages of lithium iron phosphate batteries are gradually revealed, and the performance of lithium iron phosphate batteries is also improving with the iteration of technological upgrading." ”

It can be seen that the power battery technology pattern is not static, and the ternary lithium window period of the Ningde era is fading.

Qi Haiyan, president of Beijing Teyi Sunshine New Energy, once told the media: "Battery products themselves have competition problems with different technical routes, and the comprehensive application of interdisciplinary technologies such as various new technologies, new processes and new materials is likely to bring unpredictable progress and changes to the industry." ”

Therefore, the power battery track, no one knows where the technical route will eventually drift. Even the Ningde era itself has figured out sodium-ion batteries and laid out a variety of possible futures.

On the other hand, the so-called accumulation of technology is difficult to become a real moat without strict patent protection.

In July 2021, CATL sued China Innovation Airlines in the name of patent infringement. In response, China Innovation Airlines responded that "the product has been comprehensively investigated by the professional intellectual property team and is convinced that it will not infringe on the intellectual property rights of others".

China Innovation Airlines exuded such confidence, which drew a question mark on whether the so-called patent barriers in the Ningde era were established. Leaving aside the unconclusive verdict, just looking at the act of forced "patent license" itself, more or less reflects the technical anxiety of the Ningde era.

Perhaps, as the leader of the Ningde era, it does not have the technical advantage of overwhelming everyone. Even if it occupies half of the domestic market, the Ningde era does not seem to be TSMC.

end

Anecdotal rumors, the ningde era founder Zeng Yuqun's office wall is written with five big words - "gambling is stronger", from the past stories, Zeng Yuqun did gamble on the current Ningde era is difficult to shake the battery empire.

In the face of the environment of internal and external difficulties, the Ningde era still gambles on the next generation.

However, whether it is laying out energy storage tracks or carrying out battery recycling and power replacement business, it is impossible to reproduce the blue ocean of the past.

Taking power exchange as an example, according to the data of Tianyancha, there are more than 80,000 power exchange-related enterprises in the country, and players such as the State Grid, China Power Investment, and China Southern Power Grid are all in the layout, and it is difficult to have a fixed number of whether Ning Wang can unify the country and mountains.

For car companies trying to "untie", the power exchange mode of the Ningde era is tantamount to an abyss, and once it jumps into it, it may completely lose the right to speak in the power battery.

Perhaps, the Ningde era will still fall into the embarrassing situation of more opponents and fewer friends, after all, the power exchange track is far from the monopoly field of the Ningde era, and the car companies that have decided to flee from the shackles of the power battery have no reason to throw themselves into the net.

Therefore, the situation of the new energy track is no longer allowed for the Ningde era to continue to eat the old and put up shelves, only out of the supply chain, in order to fight for new growth space.