Another unicorn! Why do power battery companies frequently attract huge financing?

"Science and Technology Innovation Board Daily" on May 7 (special researcher Tian Zhen), in the field of new energy power batteries, China has run a new unicorn.

Recently, Guangzhou Juwan Technology Research Co., Ltd., a fast charging power battery enterprise under GAC Group, announced the completion of a round of financing of nearly 1 billion yuan. At last month's annual report press conference, Zeng Qinghong, chairman of GAC Group, said that after Juwan Technology Research completed the A round of financing, the valuation would reach 8 billion yuan.

It is understood that Juwan Technology Research Institute was established in September 2020, is the first privately held mixed ownership high-tech enterprise incubated by GAC Group, focusing on the research and development, production, sales and service of super fast charging power batteries and a new generation of breakthrough energy accumulators and their systems. Less than two years after its establishment, Juwan Technology Research Institute has completed two rounds of financing, and the investors include Guangfa Xinde, Guangfa Qianhe, Guangzhou Financial Holdings Fund and other well-known domestic investment institutions.

In addition, Tianyancha data shows that Guangxi Tencent Venture Capital Co., Ltd. holds 2.2604% of the shares of Juwan Technology Research Institute, and the subscription amount is 1815,425 yuan.

The "East Wind" and Challenge of New Unicorns

New energy is a hot land for investment in recent years, whether it is an investment institution that pursues financial returns, or a traditional car company and Internet enterprise seeking business transformation, they have recruited troops in the new energy vehicle industry chain to invest in the layout. The rapid growth path of Juwan Technology Research is catching up with the east wind of this wave of the times.

According to the "New Energy Vehicle Industry Development Plan" (2021-2035), by 2025, the sales volume of new energy vehicles and new vehicles will reach about 20% of the total sales of new vehicles. The new energy power battery accounts for about 40% of the total cost of new energy vehicles, which is a key link in the new energy industry. Research and Markets' survey data shows that the global lithium-ion power battery market size is about 80 billion US dollars in 2021, and it is expected that by 2025, the global power battery market size will reach 300 billion US dollars.

On the other hand, according to the data of Shanxi Securities Research Institute, the average capacity utilization rate of the global power battery industry in 2020 is only 26.5%, and the current high-end battery production capacity in the power battery industry is insufficient, but the low-end overcapacity is relatively serious, and the actual battery supply is relatively short. It is estimated that in the next 5 years, with the rapid growth of global car companies' demand for power batteries, power batteries will be in short supply. Therefore, many companies in the battery field have ushered in the spring of soaring valuations.

For example, Hive Energy, which just received an investment of 322 million yuan in March this year, raised more than 20 billion yuan last year, and now the valuation has reached nearly 46 billion. At the same time, Weilan New Energy, which introduced investment from Xiaomi and Huawei Hubble in March, has been shouted to 15 billion yuan in valuation. Zhongke Haina, which is also favored by Huawei, is now valued at more than 5 billion yuan, up 800% compared with March last year. Not to mention the upcoming listing in Hong Kong, the 60 billion valuation of China Innovation Airlines and the lithium battery known as "Ning Wang" a brother Ningde era. New energy batteries are undoubtedly a unicorn gathering "sudden wealth" track.

However, this golden track that everyone is hungry for has not always been smooth, and "new players" like Juwan Technical Research are still facing no small challenges.

The first is the capital barrier. According to GGII's research, the production of 1GWh power batteries requires a minimum investment of 360 million yuan. There is still a large gap in the technology of new energy batteries, and the high investment in research and development has set up a high barrier to entry for the industry. The second is the obvious Matthew effect in the industry. As the "heart" of new energy vehicles, the performance of power batteries is directly related to the use experience of the car, and vehicle companies generally do not easily replace battery suppliers, and it is more difficult for new entrants to obtain orders.

SNE Research released the 2021 global power battery installed capacity ranking shows that the Ningde era, which has the largest market share, occupies 36.2% of the global market, and the top ten companies together occupy 92.2% of the market, which shows the industry concentration. Backed by GAC Group's Juwan Technology Research Institute, it may be able to get more support in terms of funds and orders, while other new players need to work harder to gain a foothold.

In addition, the cost increase caused by the sharp rise in the price of upstream raw materials is also a major problem for new energy battery companies.

From disorder to orderly new energy vehicle track

With the continuous influx of funds into the field of new energy batteries, the technical difficulties of new energy batteries are gradually being overcome one by one. At the same time, the entire new energy vehicle industry is also moving towards a comprehensive upgrade.

First, the most perceptible change in wind direction in the industry is the sharp drop in government subsidies and the consequent drastic survival of the fittest. According to the Notice on the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles in 2022 issued by the Ministry of Finance, the Ministry of Industry and Information Technology and other four ministries and commissions, the subsidy standard for new energy vehicles in 2022 will decline by 30% compared with 2021 (non-public sector), and will be completely cancelled after December 31, 2022.

Under the background of the decline of subsidy policies, small and medium-sized manufacturers lacking core competitiveness have been squeezed out of the market, and the original mixed new energy vehicle market has been standardized, and sales have not fallen but have risen. According to data released by the China Association of Automobile Manufacturers, in the first quarter of this year, the production and sales of new energy vehicles in China reached 1.293 million units and 1.257 million units, respectively, an increase of 1.4 times year-on-year. Under the trend of the decline in the growth rate of national automobile production and sales, consumers have shown high confidence in new energy vehicles.

In addition, in the early stage of the development of new energy vehicles, traditional car companies have always been considered to have a relatively lagging response, but as the development of new energy vehicles enters a deep-water period, the development potential of traditional car companies should not be underestimated. The GAC Group, which incubated Juwan Technology Research, is a fresh example.

GAC Group incubated an independent intelligent electric vehicle brand, GAC Aeon, and reorganized it in mixed reform, and plans to spin off and list it. GAC Aean is now positioning the overall mid-end market, 100,000-200,000 is the main sales price range, cost-effective, single store monthly sales of about 77 vehicles, higher than the monthly sales of wei Xiaoli and other new car-making forces of the single store. It can be seen that traditional car companies with system, channel and capital advantages are very strong in the transformation of new energy.

According to data from the Yingda Securities Research Institute, among the top fifteen new energy vehicle companies in terms of sales in 2021, traditional car companies occupy ten seats, and the proportion has become larger and larger.

At present, the competitive situation in the field of new energy vehicles is gradually taking shape, and traditional car companies and new car-making forces are chasing after each other and competing and coexisting. This trillion-dollar track of new energy vehicles is still in the stage of rapid climbing.