According to the data of the China Automobile Association, the cumulative sales of new energy vehicles in China in 2021 will be 3.52 million units, an increase of 158% year-on-year, and the monthly market penetration rate will exceed 20%. Soochow Securities expects that domestic new energy vehicle sales are expected to reach 6 million in 2022, and global sales are expected to exceed 10 million, maintaining growth of more than 60%.
The mainland has proposed that carbon emissions peak in 2030 and become carbon neutral by 2060; europe, according to the European climate law issued by the European Union, member states will reduce greenhouse gas emissions by at least 55% by 2030 compared with 1990 and achieve EU-wide carbon neutrality by 2050; the United States, after returning to the Paris Agreement, set zero-emission vehicle sales to account for 50% of total new car sales in 2030 and commit to achieving carbon neutrality by 2050.
Global power batteries are in short supply
Expansion of production capacity is imminent
In the future, with the continuous improvement of the penetration rate of new energy vehicles, the demand for lithium batteries will also increase.
According to GGII forecast, global power battery shipments will reach 1550GWh in 2025, and if energy storage is included, the total global power battery and energy storage shipments will reach 1966GWh in 2025. If the time is extended to 2030, the shipment of power batteries alone will reach 3000GWh.
Source: China Electronics Information Industry Development Research Institute
By 2023, global demand for power batteries will reach 406GWh, with a power battery gap of about 17%; by 2025, this gap will expand to 40%.
In the face of deterministic market demand, the current production capacity of major battery companies is obviously far from enough.
In this context, expanding production capacity has become the most urgent thing at present. This will also greatly affect the competitive landscape of global power batteries in the future.
Foreign manufacturers are making steady progress
AVIC lithium battery and hive energy planning are the most radical
Let's look at Korean manufacturers first.
At present, LG New Energy's Michigan plant has reached 5GWh production capacity, and it is expected to expand production to 40GWh by the end of 2024. Soochow Securities predicts that by the end of 2025, the overall production capacity of LG new energy will be increased to 430GWh, and the new production will be expanded by about 275GWh.
In May 2019, SKI's general manager said that it plans to increase production capacity to 100GWh by 2025; in September last year, SKI and Ford reached a partnership to jointly invest $11.4 billion to build a battery plant and an electric vehicle assembly plant in the United States, and the production capacity will be increased to 200GWh in 2025.
Samsung SDI, a subsidiary of Samsung Group, entered the lithium-ion battery field in 1999, entered the power battery field in 2008, and put into production capacity of 19GWh by the end of 2020. Unlike LG New Energy and SKI, Samsung SDI is more conservative in terms of capacity expansion, and according to public information disclosure, it is expected that the company's production capacity will be about 50GWh by 2025.
Look at Japanese manufacturers.
Panasonic once had an exclusive partnership with Tesla, and its global market share reached 40% at one point. However, in recent years, the company's market share has declined significantly, and from 2019 to 2021, panasonic power battery market share is 24.1%, 18.4% and 12.2%, respectively. At present, Panasonic plans to increase the production capacity of its battery plant in Nedahua from 35GWh to 54GWh, and with its plants in Dalian, Wuxi and Norway in China, the company's production capacity is expected to increase to 160GWh by 2025.
Compared with foreign manufacturers, the pace of expansion of domestic battery companies is much larger.
The production capacity of CATL in 2025 is about 670GWh, and BYD's production capacity planning is more than 200GWh. In addition, the production capacity of Ewell Lithium Energy in 2025 is planned to be 300GWh, the production capacity targets of AVIC Innovation and Guoxuan Hi-Tech are greatly increased to 500GWh and 300GWh respectively, and Hive Energy has also increased the original 200Gwh to 600GWh. In addition, like Fu Neng Technology and Sunwoda, the corresponding target production capacity in 2025 is also above 100GWh.
Source: Relevant company announcements
That is to say, by 2025, the capacity planning of the above enterprises alone will exceed 3000GWh.
Planned production capacity may not land
The degree of bundling with car companies affects sales
With the expansion of major battery companies, the global power battery or will face the situation of "short supply" to "overcapacity", resulting in the investment logic of the entire lithium battery industry will also be impacted.
However, the planned production capacity of major manufacturers may not be fully landed.
Taking the Ningde era Fuding lithium-ion battery production base as an example, the project is expected to invest 18.373 billion yuan, adding about 60GWh production capacity after completion; in addition, like the Guangdong Ruidong era lithium-ion battery production project, the project is expected to invest 12 billion yuan, and add about 30GWh production capacity after completion; like the Jiaocheng era lithium-ion power battery production base, the project investment amount is 7.32 billion yuan, referred to as the addition of 15GWh production capacity and part of the PACK production line.
It can be calculated that the investment amount of 1GWh production capacity is roughly between 300 million yuan and 500 million yuan.
That is to say, in order to successfully achieve the planned production capacity in 2025, Ewell Lithium Energy needs to invest 90 billion yuan - 150 billion yuan, and hive energy needs to invest 180 billion yuan - 300 billion yuan. Even guoxuan hi-tech and Fu Neng Technology, which have already been listed, the amount of investment needs to be far more than the company's current market value.
In the future, after the release of production capacity, whether it can bring corresponding revenue to enterprises, an important factor is the degree of bundling with car companies.
Source: Pacific Auto Network
According to LG New Energy, the main customers of the company's cooperation include Tesla, Volkswagen, General Motors, Audi, Hyundai, Ford, Volvo, Porsche, etc., and domestic players such as Geely, SAIC, FAW, Changan, etc. are also its cooperative customers. In addition, LG New Energy will also establish joint ventures with Stellantis, the world's fourth largest car company formed by the merger of Chrysler and Standard Citroën, and Honda in North America.
CATL also has many customers, including companies such as Great Wall, Changan, BAIC, FAW, SAIC, GAC, Geely, Dongfeng, Beijing Motor, etc., as well as new car-making forces such as Weilai, Ideal, Xiaopeng, Nezha, Weima, and Aiways; foreign aspects, the company's cooperative customers include Tesla, Daimler, BMW, Volkswagen, Honda, Toyota, Volvo, Hyundai, Jaguar Land Rover, Renault Day and other companies.
ATD is currently self-supplied, but at the same time has begun to supply blade batteries to Ford, FAW and other car companies, and supported the Great Wall Haval H6, Weipai latte and other models, and also for the ideal car, Chongqing Jinkang, Dongfeng Xiaokang and other power batteries. AVIC Innovation has entered the supply chain list of Changan, GAC, Geely, Jinkang, GAC Toyota, Dongfeng and other car companies, and has carried out technology development with FAW, SAIC, Great Wall, Volkswagen, Daimler, etc.; Ewell Lithium Energy has now obtained orders from international OEMs such as Daimler, Hyundai Kia, BMW Brilliance, Jaguar Land Rover and so on.
In addition to supporting Great Wall Motors, Honeycomb Energy has reached an order project with Stellantis, the world's fourth largest car company, with a total value of 16 billion yuan, and has obtained orders from 25 domestic and foreign car companies such as Geely, Dongfeng, PSA, etc.; Guoxuan Hi-Tech has obtained a strategic stake in Volkswagen in May 2020 and become its largest shareholder; Fu Neng Technology has reached a strategic cooperation with Mercedes-Benz Automobile in July 2020, with an average annual supply of 20GWh; Sunwoda has successfully entered Renault's supplier system. And nissan plans to jointly develop next-generation electric vehicle batteries.
You can simply summarize:
First of all, in terms of the number of supporting car companies, the ningde era and LG new energy advantages are the most obvious, ANDD external supply is the most imaginative; secondly, the second and third-line battery companies are more dependent on single car companies, and the elasticity of performance is also greater.
Compared to planning capacity
More attention should be paid to the company's core competitiveness
For power battery companies, even if the huge amount of funds for expansion is solved, it does not mean that the production capacity can be sold smoothly to cooperative customers, because high-quality production capacity is scarce. In addition, even if it can be sold smoothly, it does not mean that the company can make money, because cost control is not easy.
First, the quality and yield of the product.
As mentioned earlier, due to the existence of battery safety issues, LG New Energy reached an agreement with General Motors to compensate it for $1.9 billion in cost losses. Prior to this, the spontaneous combustion of the KONA electric vehicle owned by Hyundai Motor of South Korea may be related to the defective battery pack produced by LG New Energy, which led to Hyundai Motor handing over a huge order to NINGDE Times and SKI due to successive safety problems.
This shows that the power battery is not only a field with strong scientific and technological attributes, but also has high requirements for the high-end manufacturing capabilities of enterprises. Otherwise, even a company like LG New Energy could lose money due to the recall.
Second, the ability to lead the technology.
As of the end of June 2021, CATL has 7878 R&D technicians, including 134 doctors and 1524 masters, the company has a total of 3357 domestic patents and 493 overseas patents, and a total of 3379 domestic and overseas patents are being applied; the company's R&D expenses have increased from 1.99 billion yuan in 2018 to 3.569 billion yuan in 2020. By the first half of 2021, the company's research and development expenses will be 2.794 billion yuan, an increase of 115.16% year-on-year.
BYD's R&D expenses in the first half of 2021 were 2.996 billion yuan, and the overall R&D expense ratio was 4.77%, but the investment also included vehicles, semiconductors and other business areas in addition to power batteries; the R&D expenses of Ewell Lithium Energy and Guoxuan Hi-Tech were 551 million yuan and 249 million yuan, respectively, and the R&D expenses of Fu Neng Technology and Sunwoda were 247 million yuan and 1.001 billion yuan, respectively. The research and development expenses of the latter companies are relatively large with the Ningde era and BYD.
Distribution of technology source countries in the global power lithium battery industry
(Data as of July 2021)
Source: Prospective Industry Research Institute
Third, scale advantages and cost control capabilities.
As mentioned above, since 2017, the market share of the NINGDE era has ranked first in the world, and it will further increase to 32.6% by 2021.
Larger companies are able to maintain a higher gross margin at the same selling price. Moreover, with the continuous expansion of lithium batteries, the continuous increase in the price of upstream related products has also put forward higher requirements for the cost control ability of battery companies. For power battery companies, although shipments and market share are very important, the ultimate look is the profitability of enterprises, because enterprises can only continue to invest in research and development, achieve the gathering of excellent talents, and cope with changing technology iterations.
conclusion
Common challenges faced by global domestic enterprises
As of the third quarter of 2021, LG New Energy's market share in Europe and the United States is as high as 44% and 29%; Panasonic, with its cooperation with Tesla, ranks first in the United States in 2020, with a market share of 46%.
Since entering the power battery field in 2008, Samsung SDI has established a number of power battery factories in South Korea, China, the United States, Hungary, Malaysia and other places to lay out the global market.
However, domestic battery companies are mainly based on the domestic market.
Taking the Ningde era as an example, the global installed capacity in 2020 will be 34GWh, but the domestic installed capacity will reach 31.79GWh. That is to say, its overseas installed power batteries account for only 6.5% of the overall proportion.
However, starting in 2021, this situation has changed.
As part of the production capacity of Tesla's Shanghai factory is used for export, the proportion of overseas business in the Ningde era continues to increase. In the first half of 2021, the company's overseas operating income was 10.2 billion yuan, accounting for 23.14%, an increase of nearly 7.4 percentage points over the end of 2020.
The Ningde era is still like this, for other domestic battery companies, globalization can be said to be more arduous and long-term.
However, if China's power battery wants to truly become a world-class enterprise and truly have a competitive advantage in the world, it must go global.
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Source丨East Asia Economic and Trade News Reporting Group
Edited again and again
Audit 丨Li Zhuang Zhang Guiming
Final Judgment 丨Han Dachuan
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