Power battery global war: how should Chinese companies fight?

Written by | Tommy

Edit | Yang Bocheng

Caption | IC Photo

Chinese power battery manufacturers are increasingly speaking in the global market.

On May 2, statistics from SNE Research, a South Korean market research firm, showed that in the first quarter of 2022, the global power battery loading volume was 95.1 GWh, an increase of nearly double that of the same period in 2020. Among them, the loading volume of the Cataline era reached 33.3 GWh, an increase of 137.7% year-on-year, and the market share was as high as 35.0%. As of 2021, CATL has been sitting on the throne of the world's largest power battery manufacturer for five consecutive years.

It is not only the Ningde era that stands out, but also the power battery manufacturers from China dominate the list with absolute advantages. In the top ten of the global power battery loading volume, Chinese power battery manufacturers occupy six seats, and the year-on-year increase in loading volume exceeds 100%, namely CATL Era (35.0%), BYD (11.1%), Zhongxin Airlines (4.4%), Guoxuan Hi-Tech (2.7%), Hive Energy (1.3%) and Yiwei Lithium Energy (1.2%).

It is worth mentioning that the market share of the top ten power battery manufacturers is 91.8%, while China's power battery manufacturers account for 55.7%. In contrast, the market share of South Korean power battery manufacturers LG New Energy, SK On and Samsung SDI is 26.3%, down from the same period in 2021, and the market share of Japanese power battery manufacturer Panasonic is only 9.9%, less than 10%.

As the process of China's new energy vehicles going to sea is becoming increasingly fierce, the wave of Chinese power battery manufacturers going to sea is also sweeping in.

Nuggets overseas markets

According to the data released by the website of the China Chemical and Physical Power Industry Association, since 2016, China's lithium battery export volume and export amount have continued to expand. In 2021, China exported a total of 3.428 billion lithium batteries, an increase of 54.34% year-on-year, and the export value expanded to 28.428 billion US dollars, an increase of 78.34% year-on-year.

China's export of lithium batteries can be roughly divided into consumer batteries and power batteries, in the power battery exports, China's power battery manufacturers continue to expand their territory, Europe and the United States new energy vehicle manufacturers are also more and more inclined to purchase China's power batteries.

Taking CATL as an example, according to the 2021 financial report, CATL's business in overseas markets has achieved rapid growth, and its overseas market business revenue was 27.87 billion yuan, an increase of 2.5 times year-on-year, accounting for 221.38% of total revenue from 15.71% in the same period of 2021 to 221.38%, and the gross profit margin of overseas market business was 30.48%, higher than the gross profit margin of The Chinese market business.

Among them, Tesla, as the largest customer of the Ningde era, contributed revenue of up to 13.04 billion yuan, accounting for about 14% of the revenue of the power battery business.

Tesla has opened up a shortcut for the layout of the CATL era in overseas markets. Up to now, Tesla and CATL have signed two cooperation agreements, one is February 2020, the supply period is from July 1, 2020 to June 30, 2022, and the other is June 2021, and the supply period of the agreement signed by the two parties is from January 2022 to December 2025.

Whether it can smoothly open up overseas markets is directly related to the ceiling of the development of a power battery manufacturer. On February 14, at a research meeting for specific objects, Zeng Yuqun, chairman of CATL, made it clear that "the US market, NINGDE times must go in", and will also consider building power battery factories in Mexico, Canada and other places.

In April 2022, according to Bloomberg, CATL is considering spending $5 billion to build a power battery factory with an annual capacity of 800GWh in North America to supply customers including Tesla. This move is believed that CATL intends to support Tesla's US factory nearby, and building a factory in the United States can also avoid high trade tariffs.

It is not only the Ningde era that went to the United States to invest and build factories. As the biggest competitor of the CATL era, LG New Energy issued a statement on March 24, saying that it plans to invest about $1.4 billion to build a second wholly-owned power battery plant in Arizona, USA, with a planned annual production capacity of 11GWh, which will start production in the second half of 2024.

At the same time, LG New Energy also announced another expansion plan for the North American market. According to the plan, LG New Energy will jointly invest $4.1 billion with multinational automaker Stellantis to build a power battery plant in Windsor, Ontario, Canada, with a planned annual production capacity of more than 45GWh, and start production in the first quarter of 2024.

In fact, since the construction of power battery factories in Thuringia, Germany, in the Ningde era, almost all of the top ten power battery manufacturers in China's power battery loading volume have begun to accelerate the layout of overseas markets.

Among them, bydir, the world's third largest power battery manufacturer, has the most eye-catching performance. In the first quarter of 2022, BYD's loading volume was 10.5GWh, an increase of 220.4% year-on-year. Among the top ten power battery manufacturers, its year-on-year growth rate ranked first, and its market share jumped from 6.7% in the same period of 2021 to 11.1%.

It is worth noting that the blade batteries produced by BYD are almost used by their own models, and their power battery loading volume is almost equal to the delivery of new energy vehicles. In other words, with ONLY ONE NEW ENERGY VEHICLE MANUFACTURER, BYD's loading volume accounts for more than 10% of the global market.

In August 2021, there were rumors that BYD was about to supply blade batteries to Tesla in the second quarter of 2022, and Tesla models equipped with blade batteries have entered the C-sample testing stage. Two months later, news came that BYD had received an order for Tesla's 10GWh. If the rumors are true, it means that BYD's market share will be further enhanced, and even expected to surpass LG New Energy, the world's second largest power battery manufacturer.

At the same time, the layout of BYD's new energy vehicle business in overseas markets is also in full swing. In April 2022, it was reported that BYD's first overseas factory will land in Thailand, and work with Thai Siam Automobile Group to create a new platform for mutually beneficial and win-win cooperation in Line with Thailand's new energy industry. The plant is expected to start operations in June, and the first model planned to be produced is BYD Dolphin.

A person in the power battery industry told DoNews (ID: ilovedonews) that BYD's factory in Thailand will have a significant impact on its layout in overseas markets, on the one hand, Thailand as a fulcrum is conducive to radiating the entire Southeast Asian market and the Australian market; on the other hand, the increase in new energy vehicle production capacity will also drive the increase in the market share of power batteries.

In addition, Hive Energy announced that it is deeply developing european major customers, has reached a strategic cooperation with a top five new energy vehicle manufacturers and obtained the fixed point of its multiple key projects, and the cooperation with another international mainstream automobile manufacturer is also steadily advancing; Guoxuan Hi-Tech said that it will be listed on the Six Swiss Exchange, and the funds raised will be used for international industrial layout, accelerating the pace of international strategy and global competitiveness.

Technology is the foundation of the rise

China's power battery manufacturers have won six of the top ten power battery installed vehicles in the world, and their confidence comes from the research and development and accumulation of battery technology.

At the 2022 China Electric Vehicle 100 Forum held on March 26, Wu Kai, chief scientist of CATL, revealed that CATL launched the third generation of CTP technology (Cell To Pack, batteryless module assembly) through continuous technology iteration, with the internal code name "Kirin". Under the same chemical system and the same battery pack size, the power of the Kirin battery pack can be increased by 13% compared with the 4680 system.

In addition, CATL also proposed CTC technology (Cell To Chassis, battery chassis integration), the battery cell and the body, chassis, electric drive, thermal management and various types of high and low voltage control modules, etc., can make the vehicle mileage exceed 1000 kilometers, and through the intelligent power domain controller, optimize power distribution and reduce energy consumption, the 100 km power consumption to less than 12kWh. It is reported that CATL will officially launch a highly integrated CTC battery around 2025.

On a par with the Ningde era Kirin battery, there is also a BYD blade battery. In March 2020, BYD officially released the blade battery, through a series of structural innovations, the blade battery in the increase in range at the same time, safety performance is also greatly improved, volume utilization rate increased by more than 50%, and cost reduction of 30%.

There are also some new battery technologies worth looking forward to, such as in the 2022 China Electric Vehicle 100 Forum, Weilan New Energy Chief Scientist and founder Li Hong revealed that the company is cooperating with Weilai to plan to launch a single charge based on the ET7 model to continue 1000 kilometers of hybrid solid-liquid electrolyte batteries, battery pack capacity of 150kWh, monomer energy density of 360Wh/kg, the hybrid solid-liquid battery is expected to start mass production at the end of the year or the first half of next year.

In fact, in some battery technologies, the final form of mixed solid-liquid electrolyte batteries solid-state batteries is generally optimistic. Compared with the existing power battery, although the solid-state battery is also inseparable from lithium, it has almost no lithium-ion consumption in the process of charging and discharging, which can keep the capacity of the solid-state battery stable for a long time and greatly improve the cycle life.

Some people believe that solid-state batteries will become the ultimate form of new energy vehicle power batteries, and it is also an important watershed and technological commanding height in the power battery industry. Although the mass production of solid-state batteries seems far away, the horn of war has long been blown. According to the "Global Solid-State Battery Market 2017-2021" released by market research institute Orbis Research, the global solid-state battery market will grow at a compound annual growth rate of 72.33% from 2017 to 2021.

In addition, in the case of high prices of upstream lithium resources, CATL also launched a plan to find alternatives to lithium-ion batteries.

In July 2021, CATL officially released the first generation of sodium-ion batteries, and the energy density of the cells of sodium-ion batteries reached 160Wh/kg, which is currently the highest level in the world. Charging at room temperature for 15 minutes, the power can reach 80%, even in the low temperature environment of -20 ° C, still has more than 90% discharge retention rate. According to the planning of the Ningde era, the energy density research and development goal of the next generation of sodium-ion batteries is more than 200Wh/kg, and various materials more suitable for sodium-ion batteries have been developed to promote them to enter the industrialization channel.

It is foreseeable that after entering 2022, the pace of Chinese power battery manufacturers to lay out overseas markets will accelerate again, although this road is full of thorns and difficulties, but a global power battery shuffle war is inevitable.