The dividends of the new energy vehicle market have been snatched away by power battery, chip and other parts companies, while there are few new energy vehicle companies that make money, and some OEMs even suffer huge losses. As the automotive industry accelerates the pace of electrification, intelligence and networking, OEMs and parts companies have begun a new round of games.
Selling batteries is easier to make money than selling electric vehicles
From February 1, 2022, BYD's Tang, Song, Yuan and other new energy models have increased their prices. Affected by the sharp rise in raw material prices and the decline of new energy subsidies, BYD has raised the prices of some new energy models by 1,000 to 7,000 yuan this time.
BYD, which produces both batteries and cars, has a better life than most new energy vehicle companies, achieving sales in 2021 by 231.6% year-on-year to 593,700 units, beating Tesla and winning the 2021 domestic new energy vehicle sales championship. Continuing its efforts, BYD sold 92,900 new energy passenger cars in January this year, an increase of 367.6% year-on-year.
However, BYD's current earning power is not as good as that of the Ningde era, which only sells batteries. In the first three quarters of 2021, when BYD's revenue increased by nearly 40%, its net profit fell by 28.43% to 2.443 billion yuan.
The Ningde era, known as the "King of Ning", passed a "fat year". CATL recently issued an announcement that it is expected that its 2021 performance or will achieve a net profit of 14 billion yuan to 16.5 billion yuan, a net profit increase of 150.75% year-on-year to 195.52%. Among them, the net profit in the fourth quarter is expected to reach 6.249 billion to 8.749 billion yuan. The net profit in a single quarter exceeded 6 billion yuan, reflecting a strong ability to absorb gold.
Catal of China Limited times explained that the main reasons for the performance growth are: the increase in the penetration rate of the new energy vehicle and energy storage market in 2021, driving the growth of battery sales; the company's market development has made progress, the release of new production capacity, and the corresponding increase in production and sales; the company has strengthened cost control, and the proportion of expenses to revenue has decreased.
According to the statistics of the China Automobile Association, in 2021, the sales volume of new energy vehicles in the mainland will be 3.521 million units, an increase of 160% year-on-year. As a battery supplier for many new energy vehicle companies, CATL has made a lot of money. However, many new energy vehicle companies have not gotten rid of losses.
BAIC BJEV, which has cooperated with CATL for many years, is currently performing poorly. BAIC Blue Valley, a subsidiary of BAIC BJEV, recently released a performance forecast saying that it is expected to lose 4.8 billion to 5.3 billion yuan in 2021, while deducting an extraordinary profit and loss loss of 5 billion to 5.5 billion yuan, BAIC Blue Valley is in a serious loss for two consecutive years.
In 2021, BAIC BJEV's total sales volume was 26,100 units, of which the annual delivery volume of the Jihu brand was 4,993 units. BAIC BJEV is one of the earliest batch of battery buyers in the Ningde era, as early as nine years ago, the first batch of 400 E150EV vehicles of BAIC BJEV were all batteries of the Ningde era. From the joint development of the first batch of pure electric E150EV prototypes of BAIC BJEV to the release of EU260 products, there are NINGDE eras everywhere.
The pure electric vehicles developed by BAIC BJEV have been successively launched in major cities such as Beijing, Xiamen and Guangzhou. In 2016, BAIC BJEV held a grand delivery ceremony in Guangzhou, delivering 1952 pure electric vehicles at one time, which was the highest in China at that time, and the delivered models included five pure electric vehicles such as EU260, and the main purchase of vehicles was more than ten companies such as Spruce Smart New Energy, with a number ranging from 50 to 500.
In 2017, NINGDE Times beat BYD to win the domestic power battery loading volume championship, and BAIC BJEV made a lot of efforts. BAIC BJEV has exceeded the 100,000-unit mark in 2017 and sold 150,600 units by 2019. Just in 2019, BAIC BJEV and CATL comprehensively deepened strategic cooperation, following the joint release of the world's first CTP power battery system, the two sides signed a framework agreement to deepen cooperation in the supply of new energy vehicle power batteries and the research and development of core technologies for power batteries.
However, BAIC BJEV's situation took a sharp turn for the worse in 2020, with annual sales of 25,900 units, down 82.8% year-on-year. The first financial reporter found that Spruce Smart New Energy, which was once an important procurement customer of BAIC BJEV, was in trouble with its shared car platform being affected by the epidemic. According to the February 6 driving APP, only one point in Guangzhou can book the BAIC EC200, and the number of cars that can be booked at the other three points is displayed as zero.
Frequent quality problems of pure electric vehicles in the early days of BAIC BJEV, the impact of the epidemic on B-end online ride-hailing vehicles, and the intensification of competition for new models in the A00-class electric vehicle market are considered to be the main reasons for the cliff-like decline in BAIC BJEV's sales. In the face of difficulties, BAIC BJEV adjusted its strategy, including the development of high-end brands such as Jihu, but it has not yet broken through, and Jihu did not achieve the target of 12,000 vehicles last year.
It is worth noting that among the many new energy OEMs that purchase the Ningde era, not only BAIC BJEV, but also Weilai and Xiaopeng Automobile, a new car-making force that doubled sales by nearly 100,000 units in 2021, are expected to still not get rid of losses last year. Due to the large investment in research and development costs and the increase in the price of components such as chips and batteries, new energy vehicle companies such as Weilai and Xiaopeng Automobile have earned a lonely in their busyness. The beneficiaries of this round of hot sales of new energy vehicles are upstream parts suppliers led by CATL and other suppliers of raw materials and equipment.
Tesla is one of the very few new energy OEMs that has made a profit by purchasing CATL batteries. In 2021, tesla generated a $5.5 billion net GAAP net profit and $5 billion in free cash flow, excluding $6.5 billion spent on new plant construction and other capital expenditures. Last year, Tesla delivered 936,000 new vehicles worldwide. Tesla said the profitability increased due to further reductions in the cost of bicycles, increased car deliveries and increased profits in other businesses such as car rental. Model Y is the key to Tesla's profit margins, and the localization of the Shanghai Gigafactory is also an important factor.
However, Tesla's profitability, founded in 2003, is far less smooth than the Cataline era, and it only achieved annual profit for the first time in 2020, with a net profit of $721 million for GAAP. But behind this turnaround report card, the biggest contributor is carbon credits, and Tesla made $1.58 billion in 2020 alone by "selling carbon credits". Founded in 2011, ningde times, since its official announcement of results, has been making money, last year in the lithium battery part of the raw material prices rose by more than 200% still achieved a new high in net profit.
The relationship between parts and components companies and OEMs is unpredictable
Power batteries once accounted for more than 50% of the cost of new energy vehicles. In recent years, with the advancement of technology and the increase in scale, the price of power batteries has shown an overall downward trend. Wu Hui, general manager of the research department of Yiwei Economic Research Institute and president of China Battery Industry Research Institute, said in an interview with the first financial reporter that the current proportion of battery costs is different for different models, and electric vehicles priced at more than 200,000 yuan, if equipped with 60KWh batteries, battery costs account for about 25 to 30%.
Battery costs and prices vary from supplier to supplier. In 2018, the Swiss United Bank (UBS) released a test evaluation of panasonic, LG Chemical, Samsung SDI and CATL batteries, and the cost of Panasonic batteries was 0.11 US dollars / watt-hour (about 0.76 yuan / watt-hour), far lower than the other three competitors, and the battery cost of the Cataline era was about 0.15 US dollars / watt-hour (about 1.03 yuan / watt-hour), the highest cost among the four companies.
Due to the trade secrets involved, both car companies and power battery manufacturers have basically not disclosed the specific price of power battery orders. However, insiders of the Ningde era once told the first financial reporter that the evaluation price of UBS at that time was not necessarily accurate, but the Ningde era has not responded to this.
Due to the shortage of power batteries and the rapid rise in the price of raw materials such as lithium carbonate, the price decline of the power battery industry in 2021 has come to an abrupt end, and power battery manufacturers such as Ningde Times and BYD have raised battery prices.
Wu Hui said that in the past year, the mismatch between supply and demand and the high expectations led to a sharp rise in material prices, and enterprises in the new energy industry chain were also facing the pressure of cost control and raw material shortage while their performance soared. In the context of the immature battery technology, the industry pattern is still uncertain, so the forward-looking prediction ability of the market, technology and products will be the core competitiveness of industrial chain enterprises.
A few days ago, there are media reports, Xiaopeng Automobile said in an institutional survey that the price increase of the Ningde era is too large, in order to cope with the pressure brought by the rising cost, the future will gradually replace the Ningde era power battery with the battery of AVIC lithium battery, and the iron lithium battery of Ewell Lithium Energy will continue to be used, mainly matching low-end models. The first financial reporter asked Xiaopeng Automobile for verification in this regard, and the other party had not responded as of press time. However, in the past one or two months, Tesla, Xiaopeng Motors and many other car companies have raised the price of electric vehicles, passing on some of the rising costs to consumers.
Tesla said the company will remain innovative to reduce manufacturing and operating costs, and over time hopes that hardware-related profits will accelerate along with software-related profits.
Due to battery cost considerations, in the past, people often thought that the overall profitability of electric vehicles was not good, Tesla is further solving the cost problem through technological innovation and other means, greatly reducing the cost of a bicycle to about $36,000, and the reduction of battery cost has become one of the key factors to achieve this. Tesla said: "Large castings, structural battery packs, 4680 batteries and other aspects will help us continue to reduce product costs." ”
Recently, it was reported that Panasonic Electric Chief Financial Officer Hirokazu Umeda announced that Panasonic plans to start pilot production of 4680 batteries in April, and will first supply Tesla after official mass production. Tesla China insiders said in an interview with the first financial reporter that the 4680 new battery has not yet been mass-produced, and will be produced by Tesla's own production and battery suppliers, and the domestic model has not determined the loading time.
Tesla has also joined the list of self-produced batteries after having three battery suppliers, Panasonic, LG Chem and CATL. Not only Tesla, but also volkswagen, GAC Aean and many other OEMs have also accelerated the process of battery production.
Whether it is an OEMs or a parts company, they are trying to grab more dividends from the new energy vehicle market. Ningde era, which has accounted for half of the total installed capacity of domestic power batteries, continues to increase the difficulty of increasing profits in the original model, and it is urgent to drive performance growth through new engines, which launched the power exchange brand EVOGO last month, providing a combination of power exchange overall solutions, and launched a chocolate power exchange block. According to the information released by CATL, the first car company to carry the EVOGO of CATL is FAW Besturn, and the cooperation of other car companies is also on the road. Car companies such as Weilai and BAIC BJEV have taken the lead in the power exchange track, and have not yet appeared on the list of car companies that have replaced the power of EVOGO. BAIC BJEV and Aodong New Energy cooperate to operate a pure electric taxi swap model. Cataline Times said that the future and WEILAI can be shared in terms of resources.
The Ningde era wants to deeply bundle with new energy vehicle companies through the power exchange mode, but whether new energy vehicle companies are willing to rely on the power battery of the Ningde era continues to increase, which remains to be seen. As of January 2022, the number of superchargering stations opened by Tesla in the Chinese mainland has exceeded 1,000, and the number of superchargering piles has exceeded 8,000, with more than 700 destination charging piles and more than 1,800 destination charging piles.
The car track is shifting from the first half of electric vehicles to the second half of smart cars, the entire automotive industry chain is constantly changing, the space for hardware will be gradually squeezed, and the era of software-defined cars is coming. In order to further improve profitability, Tesla has continued to update the beta software of the Fully Autonomous Driving System (FSD) in addition to competing for hardware dominance such as batteries, and its software test vehicles in the United States have increased from a few thousand in the third quarter of 2021 to nearly 60,000 in the fourth quarter. In January, the price of Tesla FSDs in the United States rose to $12,000. In the future, Tesla's software business will be the main focus. Tesla's FSD stack will be deeply refined in the coming months, and it is predicted that the supercomputer Dojo will begin to come in handy this summer.
Chen Qingtai, chairman of the China Electric Vehicle 100 Association, said that cars are transforming from mobile tools into super mobile intelligent terminals. Since the invention of the automobile, every important breakthrough in automotive technology is the result of close cooperation between the whole vehicle and parts enterprises, and also directly affects the development and transformation of the upstream and downstream industrial chain of the automobile. The future of the automobile species will make the concept and scope of auto parts change, from the power system energy storage battery, hydrogen fuel cell, motor, electronic control, power semiconductor to networking, intelligent involved in the chip, computing platform, sensor, lidar, controller, execution device, and then to the vehicle control system, high-precision map, network communication, cloud control platform, AI computing and other software, have become an important part of the industrial chain. At the same time as the industrial chain changes, the value chain is also changing rapidly, software is the foundation of the future of the car and the core of competitiveness, some institutions predict that in the vehicle cost system, the proportion of software cost will rise from 15% to 60%.
With the sudden changes in the industrial chain, OEMs and parts companies have accelerated technological innovation while grabbing the value highland.