Electric manned vehicles, lithium batteries, and solar cells are known as the "new three" of China's exports. In 2023, the export scale of the "new three" will exceed one trillion yuan for the first time, becoming a new bright spot in the growth of mainland foreign trade.
However, the major domestic new energy vehicles, lithium batteries and photovoltaic manufacturers have to face the problem of "involution" when they enjoy the dividends brought by the high prosperity of the industry. Exporting high-quality production capacity overseas has become the consensus of the current "new three" enterprises.
New energy car "roll out"
The price war of cooking oil has not died down, and even began to appear "backlash" - relying on the rough "price for volume" strategy, car companies have won market share in the short term, but lost profits, when selling a loss has become the norm, behind the blossoming new energy vehicle market, the industry "blood loss" situation at the cost of consuming the profitability of car companies will continue.
Chinese automakers and power battery manufacturers are seizing the window period for the development of global new energy vehicles and accelerating their move towards international brands, which is a bottleneck that they are difficult to break through in the era of internal combustion engines.
In 2023, China's automobile production and sales scale will exceed 30 million units for the first time, and the export volume will reach 4.91 million units, a year-on-year increase of 57.9%, surpassing Japan for the first time in export volume and becoming the world's largest automobile exporter. Exports of new energy vehicles totaled 1.203 million units, reflecting a 77.6% y/y increase. In other words, for every four cars exported by the mainland, nearly one is a new energy vehicle.
Specifically, overseas markets are becoming an important source of growth for car companies.
In 2023, BYD's overseas sales of new energy passenger vehicles will exceed 240,000 units, a year-on-year increase of 337%, SAIC Group's overseas sales will reach 1.208 million units, becoming the only Chinese auto company with overseas sales exceeding one million units, Great Wall Motor's overseas sales will exceed 314,000 units, a year-on-year increase of 82.37%, and its overseas revenue will double to about 53.1 billion yuan, and overseas markets will contribute 274,000 units to Geely Automobile, with exports increasing by 38% year-on-year. The GAC Group's own brand sales in overseas markets are approximately 55,000 units.
It is worth mentioning that in addition to the number of all the way, the quality has also achieved a leap, and the mainland's new energy vehicles have truly achieved a rise in volume and price. According to data released by the General Administration of Customs, the average export price of new energy vehicles in mainland China has increased from US$19,500 in 2021 to US$23,800 in 2023.
With the rapid growth of electric vehicles, Chinese new energy vehicle brands are changing the low-end impression left by consumers in developed countries in Europe and the United States in the past.
The price of BYD seal in Europe is 350,000~400,000 yuan, which is nearly double the starting price of less than 200,000 yuan for the domestic version; the starting price of SAIC Volkswagen ID.3 model in China has dropped to less than 120,000 yuan, but the foreign price is more than 300,000 yuan; and the foreign price of Nezha AYA series, which is less than 100,000 yuan, is as high as 150,000 yuan.
Some people in the auto industry told the 21st Century Business Herald reporter that the price of Chinese brand new energy vehicles overseas is generally high, in addition to tariff reasons, it is inseparable from the improvement of technology, performance and product strength of China's new energy passenger vehicles.
According to the plan, BYD's overseas sales target for this year is 500,000 units, double last year's 240,000 units, and in 2024, GAC will introduce 14 self-owned brand models to overseas markets, add about 200 overseas outlets, and complete the annual sales target of 120,000 units of 150,000 units, and the overseas sales target of 500,000 units by 2030. At this year's Beijing Auto Show, Great Wall Motor announced that it expects its annual sales in overseas markets to exceed one million units by 2030, of which high-end models will account for more than one-third of sales.
Feng Xingya, general manager of GAC Group, said in an interview with the 21st Century Business Herald reporter that GAC's international plan is to go out (vehicle sales to overseas markets), go into (build factories overseas), and go up (brand up). "GAC is lagging behind in 'going out', and GAC is currently in the 'going out' stage, so it is necessary to speed up the construction of overseas factories and parts, and at the same time strive to take the lead in the 'going up' stage and become a global brand. He said.
As Chinese auto brands focus more on overseas markets, many institutions predict that China's auto export sales will reach 5.5 million units in 2024.
However, when it comes to the current export boom, some people in the industry bluntly said that "don't think about exports so easily, more and more companies are pouring into overseas markets, and price wars are inevitable."
Lithium battery goes overseas to find new growth points
A car goes to sea, driving the "whole chain". Under the rapid growth of new energy vehicles, China's automobile industry has accelerated its going to sea, and at the same time, the new energy vehicle industry chain led by power batteries has also begun to lay out in the world, and China's lithium batteries have entered the "fast lane". As one of the "new three" of China's foreign trade, major power battery companies are also accelerating their efforts to compete for global market share.
From the 2023 annual reports of various power battery companies, it is not difficult to find that "going overseas" is becoming a new growth point for their business.
CATL's overseas business has grown rapidly, with overseas revenue reaching 130.992 billion yuan in 2023, a year-on-year increase of 70.29%, accounting for 32.67% of total revenue, an increase of 9 percentage points over last year. According to statistics from SNE Research, the market share of CATL's overseas power batteries will be 27.5% in 2023, an increase of 4.7 percentage points year-on-year.
Thanks to the initial results of overseas business and the improvement of the delivery capacity of energy storage business, Gotion Hi-Tech's net profit in 2023 will be 930 million yuan, a year-on-year increase of 201%, a seven-year high. Among them, the revenue of overseas regions was 6.4 billion yuan, a year-on-year increase of more than 115%, accounting for one-fifth of the total revenue (31.6 billion yuan).
This growth rate is much higher than that of EVE and Sunwoda, which are also second-tier battery companies, but the overseas business base of the latter two is much higher than that of Guoxuan Hi-Tech. In 2023, EVE's overseas revenue will be 13.3 billion yuan, a year-on-year increase of 5%, while Sunwoda's overseas revenue will decrease by 9% year-on-year to 20.4 billion yuan.
In 2023, Funeng Technology's overseas sales will be close to 10 billion yuan, with a year-on-year increase of more than 120%, accounting for about 60% of the total annual revenue, and the gross profit margin will reach 12.72%.
Li Jin, chairman of Guoxuan Hi-Tech, said last year that the global market can be divided into four sectors: China, the Americas, Europe and Africa, Southeast Asia and South Asia, "If we only develop in China, it means that we have lost the other three markets, and if we want to make a difference, the other three markets cannot be lost."
Wang Yu, chairman of Funeng Technology, also publicly said, "Whether Chinese battery companies can maintain their advantages in the TWh era of full electrification, the most important thing is to go out and localize the industrial chain overseas." ”
In fact, in addition to exporting their products overseas, power battery companies are also accelerating the construction of overseas production bases to ensure the stability of the supply chain and reduce production costs. On the one hand, this is due to the high demand in the overseas market, and on the other hand, it is to circumvent the restrictions of relevant laws in Europe and the United States.
Specifically, since 2023, CATL has announced that it will cooperate with Ford Motor to build a new power battery plant in Michigan, with an initial production capacity of 35GWh and an investment of up to US$3.5 billion, which is planned to be put into operation in 2026; EVE plans to invest 9.97 billion yuan to build a factory in Hungary; SVOLT Thailand Pack plant started construction; Gotion Hi-Tech announced that it will join hands with European battery manufacturer InoBat to build a 40GWh battery cell and pack factory in the form of a joint venture, according to the plan, by 2030, Gotion Hi-Tech will achieve a production capacity of 300GWh in China and overseas.
Gong Min, head of UBS China's automotive research team, said in an interview that Chinese automakers account for 20% of the global auto market and more than 50% of the global electric vehicle market, but the market value accounts for only 10% of the total market value of global automakers. "Protectionism in some overseas markets will not erase China's EV sales scale, cost advantage, technological innovation and global competitiveness. ”
The photovoltaic industry is facing cyclical pressures
As the world's largest manufacturer and exporter of photovoltaic products, China's photovoltaic industry has also experienced "cold and warm" in the past year. On the one hand, the new installed capacity of domestic photovoltaic has reached a record high, and the demand of the industry is booming; on the other hand, the "involution" of the industry has intensified, and the photovoltaic industry is experiencing a new round of cycle baptism under the transformation of supply and demand pattern.
As of April 30, the 2023 financial reports and 2024 first quarter reports of 106 A-share and H-share photovoltaic companies have been released. According to the statistics of the 21st Century Business Herald reporter, the total operating income of the above-mentioned 100 photovoltaic companies in 2023 will be 1.66 trillion yuan, a year-on-year increase of 12.16%, and the total net profit attributable to shareholders of the parent company will be 146.485 billion yuan, a year-on-year decrease of 19.14%.
Revenue growth and profit decline, the two performance indicators of the domestic photovoltaic industry have shown a rare "divergence" performance in recent years.
In the past few years, the high-growth demand of the downstream has stimulated the supply desire of all links in the industrial chain. While the major photovoltaic companies collectively enjoy the dividends of the industry, they also bury dark mines due to frequent expansion of production. As a result, since the fourth quarter of 2023, with the sharp decline in prices in the domestic photovoltaic industry chain, the profit margins of many photovoltaic companies have been squeezed.
The side effects of price "involution" even continued until the first quarter of this year. During the reporting period, the total operating income and net profit of the above-mentioned 100 photovoltaic companies decreased compared with the same period last year. Especially in terms of net profit, many leading photovoltaic companies have a profit and loss division, and their performance in the first quarter of this year has suffered a waterloo.
The 21st Century Business Herald reporter noticed that in different links of the photovoltaic industry chain, each listed company faces different business challenges under the pressure of the cycle.
Judging from the performance in 2023, the prices of upstream products in the industrial chain have fallen significantly, which has directly led to a sharp decline in the profits of polysilicon and wafer companies.
The situation of polysilicon companies leading the annual profit camp quietly changed last year. In 2023, there will only be three PV companies with an annual net profit attributable to the parent company exceeding 10 billion yuan, namely Tongwei Co., Ltd., LONGi Green Energy and TBEA. In 2022, GCL Technology and Daqo Energy will also join the "club" of 10 billion yuan, and 4 of the 5 companies with profits of 10 billion yuan are polysilicon companies.
It should be pointed out that last year, three leading photovoltaic companies with a net profit of more than 10 billion yuan also fell into a situation of declining profits - the financial report shows that Tongwei Co., Ltd., LONGi Green Energy and TBEA achieved net profits attributable to shareholders of the parent company of 13.574 billion yuan, 10.751 billion yuan and 10.703 billion yuan respectively, down 47.25%, 27.41% and 32.75% year-on-year.
However, there are also companies whose 2023 performance is "headwinded". JinkoSolar and Trina Solar's revenue in 2023 will both exceed 100 billion yuan, with 118.682 billion yuan and 113.392 billion yuan respectively, an increase of 74.40% and 55.31% year-on-year, respectively. And on the profit side, the net profit of these two companies increased by more than 150% and 50% respectively, reaching 7.440 billion yuan and 5.531 billion yuan.
On the whole, under the price squeeze, the vast majority of domestic photovoltaic companies maintained the fundamentals of profitability last year. Among the 100 listed PV companies, more than 80% of the PV companies will be profitable in 2023.
However, this number decreases further in the first quarter of 2024.
According to the statistics of the 21st Century Business Herald reporter, about 30% of the above-mentioned 100 photovoltaic listed companies suffered losses in the first quarter of this year. Among them, there are many leading photovoltaic companies such as LONGi Green Energy, TCL Zhonghuan, Tongwei Co., Ltd., and JA Solar Technology.
"The first quarter is the traditional off-season for the PV industry. In addition, under the pressure of destocking, the prices of polysilicon, wafers, cells, and modules are in the low range, and the profits of many companies have plummeted. A photovoltaic business person told the 21st Century Business Herald reporter.
In fact, combined with the 2023 financial report and the first quarter report of 2024, the loss momentum of some companies has begun to appear since the fourth quarter of last year. Shen Wenzhong, director of the Solar Energy Research Institute of Shanghai Jiao Tong University, said in an interview with the 21st Century Business Herald reporter that in the photovoltaic industry in almost a five-year cycle, the market determines all the enterprises that can really develop well. After the iteration of technology, the concentration of the industry will increase and glow with new vitality, which is also the charm of the photovoltaic industry."
It is worth mentioning that overseas is still the main shipment market for most photovoltaic companies. The 21st Century Business Herald reporter sorted out and found that in 2023, there will be 17 photovoltaic companies with overseas business revenue accounting for more than 50%, and another 15 companies will account for more than 30%.
Photovoltaic modules, inverters and other enterprises accounted for a high proportion of overseas revenue. For example, Sungrow's overseas revenue last year was 33.369 billion yuan, accounting for 46.18%, while JA Solar's overseas business revenue was 44.428 billion yuan, accounting for 54.48%.
According to data from the General Administration of Customs, in the first quarter of this year, the mainland's photovoltaic cell exports amounted to about 9.067 billion US dollars (about 65.707 billion yuan), a year-on-year decline.
Behind this, "volume increase and price reduction" may become the main feature of this year's photovoltaic market exports.
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