How will the storm battery industry compete for the market?

The development of electric vehicles has become a trend of automobile development. According to the data, the total sales volume of new energy vehicles in China reached 507,000 in 2016. With the growth of electric vehicles, the power battery has also entered a period of rapid development. According to the latest data, China's automobile power battery production in 2016 was 30.8GWh, an increase of 82% year-on-year.

However, in 2017, the new version of the new energy vehicle subsidy policy was implemented on January 1, the subsidies for new energy vehicles began to decrease, and the power battery has higher requirements. Affected by factors such as the sharp decline in subsidies for new energy vehicles, new energy vehicle manufacturers began to push down the price of power battery manufacturers, and corporate profits tightened. The power battery industry is about to "change the sky", how should companies break?

Enterprise pressure under the New Deal

According to data released by the Federation on February 11, the sales volume of new energy passenger cars in January 2017 was 5,400, a sharp drop of 61% year-on-year. January has always been considered a low season for car sales, but is this "cliff-style plunge" normal? Cui Dongshu, secretary-general of the National Passenger Car Federation, believes that the sales of new energy vehicles dropped sharply in January, and it was only related to the re-examination of the New Deal and the new energy vehicle promotion catalogue before and after New Year's Day.

On January 23, 2017, the Ministry of Industry and Information Technology announced the first new energy vehicle promotion catalogue after the catalogue was reaffirmed. The catalogue only included 185 new energy vehicles, and many new energy vehicles are still in an awkward position. In the new version of the subsidy policy, state subsidies have fallen by about 20%, and local subsidies have been stipulated that they cannot exceed half of the national subsidies. To a certain extent, it affects consumers' purchasing enthusiasm and lowers the overall sales volume of domestic new energy vehicles, which also directly affects the power battery order volume. As new energy vehicle manufacturers are still in the adjustment period, at present, the overall start of the power battery companies is flat, and the order volume has dropped by more than 20%.

It is worth mentioning that the new version of the new energy subsidy policy mentions that the mass energy density of the pure electric passenger car power battery system is not less than 90Wh/kg, and subsidies of 1.1 times higher than 120Wh/kg; non-fast charge class The energy density of the pure electric bus battery system is higher than 85Wh/kg; the mass energy density of the special vehicle loading power battery system is not less than 90Wh/kg. This makes power battery companies need to increase the R&D and production costs and increase the energy density of products while reducing the downward pressure on downstream car prices. According to industry insiders, as subsidies have fallen sharply, controlling costs will become the biggest pressure for power battery companies.

Profit tightening

Affected by the sharp decline in subsidies for new energy vehicles, new energy vehicle manufacturers are continually pushing down power battery manufacturers to cut prices. It is understood that in February this year, the price of ternary power battery and lithium iron phosphate power battery fell by 15% compared with December 2016.

Not only that, according to the data, the new domestic power battery capacity in 2016 was 2.8 times that of 2015, while the output increased by only 82%. Substantial expansion has led to overcapacity and is also related to the decline in power battery prices.

In addition, the gradual increase in the price of power battery raw materials has brought a lot of trouble to the entire power battery industry, which has made it more difficult to reduce the cost of power batteries. It is understood that the price of ternary materials for positive electrode materials and lithium cobalt oxide has risen sharply. Data show that on February 8, 2017, the price of 4.35V lithium cobalt oxide has risen to 260,000 yuan / ton, an increase of 18% compared with December 2016; in the same period, the price of power type ternary material 523 is 155,000 to 160,000 yuan. / ton, compared to the end of the year, the increase of more than 5%. Mo Ke, chief analyst of True Lithium Research, believes that the cost of ternary materials, which accounts for about 30% of the cost of power batteries, is counter-marketing, which has brought considerable cost pressure to power batteries and auto manufacturers.

Industry will lead to drastic changes

After the “crazy” in 2016, the expansion of production has been scraped throughout the industry. In 2017, the power battery capacity is expected to reach 170GWh, which is more than 7 times the actual demand. Huang Shilin, president of Ningde Times New Energy Technology Co., Ltd. said that “the market is in an outbreak during the 15 and 16 years. Some shortages will lead some companies to feel that everyone is developing well. There are actually many enterprises that have hidden huge hidden dangers.”

To this end, at the end of 2016, the relevant departments issued a series of policies for the power battery industry, from the "automobile power battery industry standard conditions (2017)" to increase the industry's production capacity threshold to the "high-end and long-term automotive industry" related to the energy and cost of power battery systems. Development Plan, a series of policies introduced, so that many companies in the power battery industry are under pressure.

Some people in the industry believe that the problem of insufficient high-end capacity of power batteries and low-end overcapacity will be further aggravated. After the overcapacity in the battery industry, there will be a fierce price war, and problems such as falling profits will continue to plague enterprises. However, high-end production capacity will be in short supply, and those enterprises with product technology advantages, production scale advantages and market share advantages will have better room for growth. In 2017, the power battery industry is about to usher in a big wave of sand-sand screening. Some battery manufacturers with poor product quality and low safety factor will gradually be eliminated by the market.

Capital integration, technology first

At present, China's power battery has formed a market structure with BYD, Ningde era, Waterma, Guoxuan and Lishen as the first echelon. Its production capacity is more than double that of the second echelon battery company. The five power battery companies shipped more than 20GWH, accounting for more than 75% of China's power battery market. In 2017, the strength of the power battery industry will continue to intensify.

How can battery companies ensure rapid and efficient development in the industry reshuffle? Huang Shilin, President of Ningde Times, gave the answer: "The power battery is really putting this product on the car. There are two prerequisites. One is to have enough technology to accumulate, and the other is to have a big, Continue to invest in this matter. After these two conditions are combined, the investment in R&D will be very large, and at the same time, we must ensure the production capacity of a certain scale. It is difficult to do such a thing with only some of our own capital. Keep doing it."

Huang Shilin also said that in the future, the two markets of electric vehicles and energy storage will have a large enough market to support the development of the battery industry. It is understood that at present, there are many enterprises in the second echelon enterprises that form comprehensive competitive advantages in terms of price, technology and safety. These enterprises are expected to introduce funds through various means to expand their own strength and narrow the gap.

Some industry insiders predict that the strong demand for power battery market in the future will lead to frequent mergers and acquisitions, accelerated industry integration, and the power battery industry will be the leading company and the “small and beautiful” specialized company.

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