The development is not stopped, the progress is not stopped. At the beginning of 2022, China's power battery industry ushered in the "iteration" window, and under the impetus of the new product listing, Fu Neng Technology, the king of the ternary soft package technology route, captured the opportunity.
In the context of the expected solid-state battery that takes 5 to 10 years to complete the productization, semi-solid-state batteries can seize the opportunity in 1 to 2 years to achieve iteration of old technology. The huge potential market of up to 60 million new energy vehicles in the next five years is beckoning to it.
Good news comes that the semi-solid will be mass-produced
Fu Neng Technology (688567. SH) said in an investor engagement on Jan. 13 that "the company's first generation of semi-solid-state batteries (energy density 330Wh/Kg) was sampled to OEMs customers and received good feedback." In addition, the Mercedes-Benz EQS equipped with the company's products also began to accept orders in the European market.
Figure: Fu Neng Technology automated production line
In the investor interaction, Fu Neng Technology said that the company's Zhenjiang Phase I production line can be applied to the production of future 330Wh/Kg products after a slight adjustment. In the future, the company will build a similar 285Wh/Kg production line, and the time from the beginning of the ramp-up to the target value will be shortened by at least 30%.
In addition, the energy density of 330Wh/Kg means that it is close to the level of 400Wh/Kg of solid-state batteries, which is higher than the theoretical data of the high-nickel lithium technology route of 280Wh/Kg, and much higher than the level of lithium iron phosphate and sodium 160Wh/kg-200Wh/kg and other technical routes. This data means that it is possible for pure trams to have endurance beyond the performance of gasoline cars.
At present, the products produced by the Zhenjiang plant are mainly supplied to Mercedes-Benz. Soft pack batteries have a series of advantages such as high energy density, good cycle life, stable electrochemical performance, and good low temperature performance, and are generally suitable for high-end new energy vehicles. In addition, the company also has a number of production bases in Ganzhou, Jiangxi.
From the background point of view, Dr. Wang Yu, chairman of Fu Neng Technology, is one of the important developers of lithium battery technology in the world, as early as when working at Moli Energy in Vancouver, Canada, he proposed the concept of solid-state batteries and proposed two major solutions:
Scheme 1: The use of solid electrolyte to completely solve the direction of lithium metal battery charging, that is, the battery with solid as the electrolyte and conductive medium, to improve the energy density of the battery at the same time, to ensure safety. Scheme two: abandon the use of lithium metal as the negative electrode, and instead use graphite as the negative electrode, the positive pole contains lithium oxides.
However, the commercialization of solid-state batteries will take time, and semi-solid-state solutions are not only technically feasible, but also connected and can be produced using existing equipment. Semi-solid-state batteries are not excessive products compared to solid-state batteries, but more mature iterative products for the current ternary lithium batteries. According to the information provided by Fu Neng Technology, in the next 5 to 10 years, the productization from semi-solid-state batteries to solid-state power batteries will be completed, during which it will undergo three technological upgrades.
At present, the first generation of soft pack semi-solid-state batteries has been mass-produced in 2021, and the battery cell has been certified by third-party testing: the introduction of semi-solid gel electrolyte can significantly reduce the battery temperature of the needle puncture process, which can be punctured by 100% SOC. In addition, the cycle life is significantly improved, the gel semi-solid-state battery has 2000 cycles at room temperature, the capacity retention rate is more than 85%, and the ordinary liquid battery is cycled 1200 times under the same conditions, and the capacity retention rate is only about 80%.
Then Fu Neng Technology will launch the second generation of semi-solid-state batteries, which will optimize the solid electrolyte materials and electrolyte membranes, optimize the electrolyte membrane forming properties, no obvious heat shrinkage at 200 °C, only smoke and fire in case of fire, can pass the cell acupuncture experiment, and the battery energy density, high and low temperature, magnification performance, cycle life and other properties are not affected.
Then the third generation of soft-pack semi-solid-state batteries is introduced, and finally the all-solid sulfide electrolyte membrane/ soft pack all-solid-state battery is introduced.
Semi-solid-state batteries are not only small in size, but also more stable and safe, and will be safer in both production and use. In addition, semi-solid-state batteries can achieve higher energy density, the cost will also be cheaper than current lithium batteries, but also easy to recycle and reuse.
Future competitor – Panasonic?
Between power battery companies and vehicle manufacturers, there is a strategic alliance and a partner priority strategy. For example, Korean and American Ford, General Motors and other car companies, Panasonic and Tesla, in the international market, China's power battery exports have achieved impressive results, but the strategic alliance relationship is weaker than that of Japanese and Korean companies. Knocking on the door of international mainstream car manufacturers is not an easy task.
Fu Neng Technology is one of the leaders of the semi-solid technology route, and its main potential competitors in the future are not products such as lithium iron phosphate, but most likely high-nickel products such as Panasonic 4680 specifications and LG New Energy.
It is understood that from the perspective of technological development, the Panasonic 4680 battery supported by Tesla may become a product for future release. However, the premise is to improve the yield rate in the large-scale production of batteries to a reasonable level. In addition, the domestic giant Ningde Times has also been working hard to obtain high-end car customers, and they will also produce 4680 specification batteries. After the completion of the listing of South Korea's LG New Energy, the production capacity will be further expanded, and their high-nickel products are currently equipped with a series of European and American factories such as Porsche.
Figure: Global major power battery capacity planning forecast data (Source: AVIC Securities Unit GWh)
The data shows that in the next five years, the size of the lithium battery market will still double the high growth, but the risk of inefficient expansion is gradually apparent, and high-performance products are still scarce. By 2025, China will become a major producer of lithium batteries with two-thirds of the world's production capacity. CATL times and South Korea's LG New Energy will become the largest production plants. From the perspective of development, Fu Neng Technology attaches great importance to basic technology research, and the data shows that by 2025, its planned production capacity, industry status and influence will narrow the gap with leading manufacturers in the future.
Figure: Lithium battery capacity demand and gap calculation (Source: AVIC Securities)
In 2025, before the productization of solid-state batteries, the sales volume of new energy vehicles will reach more than 60 million units, and the penetration rate will increase to 21.2%, and the demand for technological upgrading in this huge market is very urgent.
Pure trams to complete the adaptation of urban commuting to intercity commuting, which is the goal of the current efforts. In 2022, a number of products with a theoretical mileage of 1,000 kilometers have been launched. The key to the "mileage worry" that is expected to alleviate is the improvement of battery performance. To make the battery lighter, the price is cheaper, the charging time is shorter, the safety is higher, the cold and heat resistance is better, and the key to choosing a pure tram is to choose a battery.
Five years is also enough time to digest semi-solid technology products before solid-state technology matures. In the case of semi-solid products with obvious advantages of safety and high energy density, their loading advantages are obvious. Especially in the field of high-end new energy vehicles using ternary batteries, if the theoretical endurance can reach 1,000 kilometers, and the actual use of endurance can guarantee 700 to 800 kilometers, then the current "mileage worry" does not exist. Moreover, ternary technology is more suitable for use in cold areas than lithium iron phosphate technology, and can achieve the same level of cold resistance without installing heat pumps, which is a performance that northern consumers are very concerned about.
Fu Neng Technology said that from 2021 to 2023, the company's battery energy density reached 285-300Wh/Kg, and the charging speed increased to 30-40 minutes.
On December 16, the Company and its wholly-owned subsidiary, Funen Zhenjiang, intend to enter into a Supplemental Agreement to the Multi-Year Supply Agreement (Applicable to Some Projects) with Mercedes-Benz, which stipulates that Mercedes-Benz will pay an advance payment of approximately RMB1.05 billion to Funeng Zhenjiang. Fu Neng Technology said in the 2021 semi-annual report that the Daimler project began to supply and achieve sales revenue, which will also bring an increase to the company's performance.