Wang Chuanfu's words become a proverb New energy ushered in a wave of rising prices

The source of industry development often comes from technology-driven. As hard-working representatives of the technical school, BYD and Wang Chuanfu have grown into leading enterprises and entrepreneurial leaders in the industry. With similar portraits are LONGi shares and Li Zhenguo.

Entering 2022, superimposed on various uncertainties, the development of new energy vehicles has shown a differentiated development trend. The differentiation of the industrial chain, the differentiation of the technical path, and the differentiation of enterprise performance are frequently staged in the operation of the industry. Wang Chuanfu's "prophecy" many years ago is now a slur. At a time when the sales of new energy vehicles are generally weak due to the frequent emergence of the upstream battery industry chain, BYD is attacking the city and has a unique posture.

First, why ISD is unique

Batteries that are truly used on a large scale cannot rely on rare metals

According to data released by the China Association of Automobile Manufacturers, in 2021, the production and sales of new energy vehicles reached 3.545 million units and 3.521 million units, respectively, an increase of 160% year-on-year, and the growth rate reached the highest level since 2016.

According to the data of the Association, in 2021, when new energy vehicles are running at high speed, BYD has become the biggest winner in market sales, and has become the champion of new energy vehicle sales in 2021 with an increase of 221.3% year-on-year. Although Xiaopeng Automobile achieved an increase of 275.2%, the sales base of the two in the same period last year was 181765 units and 26159 units, respectively.

At the same time, in the case of repeated epidemics and continuous rise in oil prices, new energy vehicles have once again ushered in high growth. According to the data, the wholesale sales of new energy passenger vehicles reached 317,000 units in February, a year-on-year surge of 189.1%, while the wholesale penetration rate of new energy vehicle manufacturers reached 21.8% in February, an increase of 13 percentage points over the same period last year.

As a result, the federation is expected to increase the sales of new energy passenger vehicles from 4.8 million to 5.5 million in 2022, and the penetration rate of new energy passenger vehicles is expected to reach about 25% in 2022. New energy vehicles are expected to exceed 6 million, and the penetration rate of new energy vehicles is about 22%.

The certainty of the trend is still the main tone of the new energy automobile industry. However, the general increase in sales of new energy vehicles has also diverged under new patterns such as geopolitical crises.

"Nickel prices rose by 67.2% in one day, which means that the average cost of manufacturing each electric vehicle increased by about $1,000" - Morgan Stanley's calculations corroborate the new energy automobile industry from a third-party perspective because of the "demon nickel" and ushered in a cold spring; Production and marketing data more objectively supported the formation of this pattern, on March 14, the China Association of Automobile Manufacturers released a brief description of the production and sales of the automobile industry in February 2022. In February 2022, although the production and sales of new energy vehicles continued to grow year-on-year, they declined month-on-month. Production and sales reached 368,000 units and 334,000 units, up 2.0 times and 1.8 times, respectively. Down 18.6% and 22.7% sequentially, new energy vehicle production and sales in January-February 2022 were 820,000 units and 765,000 units, up 1.6 times and 1.5 times year-on-year.

High year-on-year growth, month-on-month decline. January-February is the key time window. The soaring price of nickel is undoubtedly an important "complicity" in this "tragedy".

According to the data, in February 2022, 7 new energy passenger car companies (Xiaopeng + Ideal + Weilai + Nezha + Zero Run + Aian + Extreme Krypton) delivered a total of 42,764 new energy vehicles, with a delivery volume of -41.82% month-on-month; ON THE OTHER HAND, BYD, ON, BYD, WASD's sales in February, fell by only 5.4% month-on-month.

Under the same market premise, why does BYD "stand alone"? A period of by-one Chairman of THE BOARD wang Chuanfu's past has become popular again.

At a meeting in 2021, Wang Chuanfu said that BYD decided to insist on using lithium iron phosphate batteries from 2008, the main reason behind this is that ternary batteries use a lot of cobalt and nickel, China has no cobalt, nickel is also very little, China can not turn from the card neck of oil to the card neck of cobalt and nickel, and the real large-scale use of batteries cannot rely on rare metals.

It can be said that the rising nickel price has hit the battery production of new energy vehicles. BYD's lack of interest in ternary batteries has made it unexpectedly benefit from this round of nickel price surge.

The data shows that from January to February, the installed capacity of lithium iron phosphate batteries at 16.7 GWh far exceeds the installed capacity of ternary lithium batteries of 13.1 GWh, and the proportion of lithium iron phosphate batteries is stable at more than 55%. In February this year, the output of continental power batteries totaled 31.8GWh, and the output of lithium iron phosphate batteries was 20.1GWh, accounting for 63.1% of the total output.

At the level of car companies, Volkswagen, Hyundai, Mercedes-Benz, etc. have announced that they will use lithium iron phosphate batteries in passenger cars.

Second, whose right to speak in the industrial chain falls

The soaring lithium price has triggered a rethinking of the battery technology route

Under the influence of the unexpected situation outside the logic of the industry, BYD's attachment to the technical route of lithium iron phosphate has suddenly become the focus of discussion in the industry. Wang Chuanfu's cliché seems to weaken the growth prospects of ternary lithium batteries. In 2021, the cumulative installed market share of lithium iron phosphate batteries also surpassed ternary lithium batteries for the first time with 51.68%.

However, behind the emergence of the landmark event, the differentiation did not bring about "revolutionary" changes as expected. In the wave of new energy vehicle price increases since 2022, BYD has not lagged behind.

First of all, the trend of high density of batteries is a clear trend in the industry. With the continuous improvement of the penetration rate of new energy vehicles, the establishment of market segments will gradually become clear. In the high-end segment of new energy vehicles, ternary lithium batteries will still occupy an advantage; In addition, cars with increasing intelligence undoubtedly have a deeper demand for high-density batteries.

At the same time, in the general impression, although lithium iron phosphate has more advantages in safety and cost, the price fluctuations of lithium carbonate have also been very violent in recent years. The data shows that the average price of battery-grade lithium carbonate in East China on March 10 has reached 491,000 yuan / ton. On December 28, 2020, the average price of battery-grade lithium carbonate in East China was only 54,600 yuan / ton. This means that in less than a year and a half, the price of lithium carbonate has increased 8 times.

The raw materials of lithium iron phosphate are mainly lithium carbonate and iron phosphate, of which lithium carbonate is dominant. The sharp increase in the price of lithium carbonate has also made the price of lithium iron phosphate continue to rise. The relevant research report of East Asia Qianhai Securities said that since 2021, the price of lithium iron phosphate has continued to rise. For the whole of 2021, the price of lithium iron phosphate rose from 37,000 yuan / ton at the beginning of the year to 107,000 yuan / ton at the end of the year, an increase of 189.19%. Since 2022, the price of lithium iron phosphate has continued its upward trend, and as of March 4, 2022, the price is 163,000 yuan / ton, up 52.3% from the beginning of the year.

In this and other ways, the price advantage of lithium iron phosphate will be maintained to the end, the market does not know. It can be seen that it is not rational to question the technical path of new energy batteries because of the sudden situation of regional political crisis. But BYD's precautions are indeed worth learning from. After all, outside the battery path, BYD's achievements in the chip field are also obvious to all. Although the fields are different, the underlying logic of BYD's rapid development has a commonality, that is, to seek a stronger right to speak in the industrial chain.