Recently, the production of power batteries has soared, and the price of electric vehicles has also been fed back at terminal prices. This core logic is actually very clear, as long as the demand does not come down, the price of the power battery can not come down, reflected in the terminal is the price of further rise, car companies can not digest this cost can only let consumers to absorb. Due to the relatively stable or even declining price of oil vehicles, the demand for electric vehicles is not easy to say.
Figure 1. The price increase momentum of electric vehicles
Part 1 Pressure on production
At the beginning of 2022, the output of power batteries reached 61.46GWh, equivalent to 73.6% of the annual output (83.42GWh) in 2020; 23.9% of the output of 2021 (219.68GWh), of which the power battery production in February totaled 31.8GWh, an increase of 236.2% year-on-year, an increase of 7.1% month-on-month - in the case of the Spring Festival, the power battery production has surpassed the 31.63GWh in December last year. Continuing to grow at this rate (consumers don't budget), this year is expected to hit 400-450GWh production. Such a high output means that in the planning of battery manufacturers, the original expected demand is very high, so the battery is made at the beginning of the year, and under the condition of high raw material prices, even if it is made into inventory, it has a good return. Even if the back scheduling declines, the battery made in the front can be digested and absorbed.
Figure 2. Consumers do not admit it, and the battery factory will definitely schedule production
In February, the loading volume of power batteries was 13.7GWh, an increase of 145.1% year-on-year and a decrease of 15.5% month-on-month. Contrary to the trend of power battery production, the battery that various car companies really take to load the car has indeed increased year-on-year, but due to the impact of the Spring Festival, this data is about half the difference from the 26.22GWh capped in December. Moreover, we know that the problem is that because the cost of the battery is rising, resulting in an increase in the price of the car, whether this part can be passed on to consumers, everyone is not clear.
Figure 3. The installed capacity is running at a high level, but the volume is not a new high
That is to say, we expect the installation volume to continue to decline this year, either the demand declines and the supply and demand are rebalanced, or Chinese consumers recognize the bite of the teeth to buy trams.
Figure 4. To climb the hill, it also needs to be supported by falling battery prices, or consumers accept price increases
Under the current battery price system, in addition to the relatively rigid logistics part of the demand for commercial vehicles, buses have basically withered, that is to say, passenger cars need to absorb the amount of this part.
Figure 5. The change of the main body of domestic power battery demand in 2017-2022
Part 2 How to talk about battery prices this year?
As the cost rises, here breaks the previous pattern of locking prices according to the annual price:
● Strong battery companies: Due to a large number of demand, customers have a very interesting "low-price" battery shortage (talking about the price can eventually be achieved, because the terminal can accept) and unacceptable (the price rises, the demand falls), which forms a very interesting "low-priced" battery shortage. The outrageous price can be bought, no problem continue to sell, otherwise you will not get the battery.
● Binding relationship enterprises: This relationship such as BYD and Fudi, selling cars for the lead also has to consider whether the battery can afford, the price increase has to rise some.
● Weak battery companies: no matter how to ship, customers really do not increase the price to pay less or lie to not pay, always have to rise some.
Therefore, in the face of rising costs, the price of new energy vehicles has always risen in a wave, allowing the market to digest and absorb, and this wave is not only batteries, the cost of many components is rising.
Figure 6. China's battery price model is changing, and raw materials are included in the cost system
Summary: I think this year is not a question of price increases or price increases, who can survive smoothly after price increases - price increases lead to orders and sales falling, but there is no supply of batteries to get, and it is eliminated in all directions.
At present, it seems that it is a great challenge for the capital reserves of car companies. Indeed, the development window of emerging pure electric vehicle companies is about to close.