In March this year, Liu Jincheng, chairman of EVE Lithium Energy, expressed his opinion that in the field of power batteries, the two strong patterns of CATL and BYD are very significant, and they have considerable profitability.
This is also reflected in the report cards of various battery factories. Benefiting from the rapid growth of the company's power battery and energy storage battery business shipments in 2023, EVE's revenue and net profit increased last year, but the gross profit margin of power battery products declined.
EVE disclosed its annual report on the 18th, saying that in 2023, the company will achieve a total operating income of 48.784 billion yuan, a year-on-year increase of 34.38%, and a net profit attributable to the parent company of 4.05 billion yuan, a year-on-year increase of 15.42%.
From the perspective of financial reporting, EVE can rank "third in power battery China". However, compared with CATL and BYD, the gap is still not small.
In 2023, CATL's revenue will be 400.92 billion yuan, a year-on-year increase of 22.01%, the net profit attributable to the parent company will be 44.121 billion yuan, a year-on-year increase of 43.58%, and the net profit after deducting non-profits will be 40.092 billion yuan, a year-on-year increase of 51.65%.
In comparison, CATL's net profit attributable to the parent company exceeded EVE by 10 times.
At the same time, when the price of raw materials has plummeted and the battery price war has swept in, the divergence of revenue, net profit and sales volume is also a dilemma that most battery factories, including EVE, have to face at present.
To this end, Chairman Liu Jincheng revealed that in 2024, EVE's business goal is to intensively cultivate and return particles to the warehouse, and hopes that every factory built can achieve profitability.
—1—The installed capacity of power batteries ranks among the top four in the country
EVE's power battery business is the company's main source of revenue. According to the financial report, EVE's power battery shipments continued to grow, and its market share increased steadily.
In 2023, the company's power battery shipments will reach 28.08GWh, a year-on-year surge of 64.22%, driving operating income to reach 23.98 billion yuan, an increase of 31.41%.
Despite the significant increase in shipments, the price war led to a 1.59 percentage point decrease in gross margin to 14.37%, and capacity utilization also decreased from 91.5% to 86.6%. This is also the reason why revenue growth is weaker than shipments.
According to the data, in 2023, EVE's domestic battery market share will be 4.45%, ranking fourth in the country, ranking two places higher than in 2022, and its market share will increase by 2.01%.
From the perspective of market share, EVE's installed capacity of power batteries increased by 129.8% year-on-year last year, which was the fastest growth rate among the top ten companies in the world.
The market share of power batteries depends on the product competitiveness of C-end vehicles, and the first echelon CATL and BYD are in a stable position, the former thanks to its strong customer base around the world, and the latter has its own traffic.
EVE's main focus of differentiation in the field of power batteries lies in large cylindrical batteries, which is also the focus of attention from the outside world and investors. At present, it is generally believed in the industry that 2024 will be the first year for companies to gradually enter the mass production of large cylindrical batteries. EVE has always been at the forefront of many manufacturers.
In terms of production capacity, by 2025, EVE's planned production capacity of large cylindrical batteries will exceed 100GWh.
In 2023, EVE's domestic 46 series high-specific energy large cylindrical battery production line will finally be successfully built. Up to now, EVE's large cylindrical battery factory with an annual production capacity of 20GWh has been completed at the Jingmen base, the first phase has been put into operation, and the first batch of equipment for the second phase has also begun to enter the site at the end of 2023, and more than 5.3 million 46 series large cylindrical batteries have been rolled off the assembly line, officially realizing commercial delivery and application.
In addition, on January 31 this year, EVE also officially realized the installation of 46 series large cylindrical batteries on the JAC Refine RF8 model, achieving the goal of charging for a quarter of an hour and a range of 100 kilometers. EVE also said that the company's 46 series large cylindrical batteries have entered the mass production stage and have been officially delivered to customers in batches.
As of 2023, EVE's cylindrical lithium iron phosphate batteries have achieved a total of about 88GWh of customer intention demand in the next five years, and ternary large cylindrical batteries have also achieved a total of about 392GWh of customer intention demand in the next five years.
In the future, large cylindrical batteries are expected to become the main force for the increase in the installed capacity of EVE's lithium power batteries.
—2—Nuggets Energy Storage Decisive Battle Globalization
It is foreseeable that the status quo of "28 differentiation" of domestic power battery enterprises will continue to intensify. In order to find a way out, battery companies have set their sights on the field of energy storage and overseas markets, trying to pass on the crisis.
At present, lithium battery companies are basically walking on two legs of "power + energy storage battery", and most companies have put energy storage in a prominent position.
EVE's energy storage battery business has become the company's second largest business segment, achieving significant growth in 2023. The shipment of energy storage batteries reached 26.3WGh, the operating income was 16.340 billion yuan, and the gross profit margin was 17.03%, an increase of 121.14%, 73.24% and 8.07% year-on-year respectively.
According to the data, EVE's energy storage battery shipments ranked third in the world for two consecutive years, and its market share increased by 3 percentage points to 11%.
However, the energy storage track will inevitably enter the stage of "hand-to-hand combat" and price fighting in 2023. Low prices and homogenization are plaguing the entire industry, coupled with the imperfect business model, the performance of energy storage battery companies in 2023 has been differentiated, and the profitability is both hot and cold.
In this regard, Liu Jincheng, chairman of EVE, judged that "making energy storage batteries inherently needs to adhere to long-termism, and there are high requirements for quality itself, and downstream customers will understand the reputation and historical performance of battery factories." 2024 will be a watershed year for battery factories that have already diverged in 2023, and the financial health of battery factories will also be an important consideration for customers. It is difficult for a company that blindly adopts a low-price strategy to beat the leading companies with top manufacturing standards. Volume prices are not the main battleground, and they are not sustainable. ”
In the field of energy storage business, EVE has launched a new generation of Mr. flagship series products, with a capacity of up to 628Ah and the third-generation high-speed lamination technology, with an energy efficiency of 96%; The Mr.Giant system uses a standard 20-foot cabinet with an energy capacity of 5MWh and a system energy efficiency of up to 95%.
The company is the first in the industry to launch a large iron lithium battery cell for energy storage, which effectively solves the multiple challenges of large-scale power stations in terms of management, safety and economy, and meets the trend of the TWh era. The company's planned industry's first single largest 60GWh energy storage gigafactory is under construction.
EVE plans to further improve the delivery ranking this year and next year in terms of energy storage batteries, and gradually increase the delivery ratio of packs and systems from this year.
In the view of starting point lithium battery, in the fierce competitive environment, product quality, scale, cost, brand influence, capital, channels and other factors are related to the success or failure of energy storage battery enterprises.
In terms of overseas markets, for the head battery factories, globalization has become a must-answer question under the overcapacity crisis, and they may be out of the market if they do not go overseas. 2024 will also be a year of acceleration for going overseas.
At present, Chinese battery manufacturers, including CATL, BYD, Sunwoda, EVE Lithium Energy, Honeycomb Energy, China Innovation Airlines, Envision Power, Ruipu Lanjun and other enterprises have announced plans to build factories abroad.
On March 25, Zeng Yuqun, chairman of CATL, proposed "open innovation" in a public speech in Hong Kong, refining CATL's global development concept for the first time, and Gotion Hi-Tech plans to exceed 100 billion yuan in overseas sales by 2027.
As of the end of 2023, EVE has planned factory projects in Malaysia in Southeast Asia and Hungary in Europe.
On March 24 this year, it was reported that EVE was negotiating a new power battery factory in the United Kingdom, with an investment of at least 1.2 billion pounds (about 10.9 billion yuan). If the UK factory is landed, it will be EVE's fourth overseas production base.
In addition to directly building production capacity overseas, EVE actively explores new models and has reached important cooperation with three internationally renowned companies, Daimler Truck, PACCAR and Electrified Power, through the mode of charging licensing fees, and plans to jointly build power battery production capacity in the United States to serve the heavy truck market in North America.
However, it should be clear that going overseas is only a path that first- and second-tier enterprises can try, and it is difficult for small and medium-sized enterprises that do not have advantages in capital, customer resources, channels, etc. At that time, the number of domestic battery suppliers will be further reduced, and the industry concentration will be further improved.