With the overall recovery of the automobile market, the production and sales of new energy vehicles have been booming since July, and power batteries have ushered in double growth.
In October, China Dynamics (17.060, 0.08, 0.47%) battery installed vehicles totaled 5.9GWh, a year-on-year increase of 44.0%, continuing to maintain a growth trend. Among them, the installed capacity of ternary lithium batteries was 3.4GWh, an increase of 15.7% year-on-year, and a decrease of 19.1% from the previous month; the installed capacity of lithium iron phosphate batteries was 2.4GWh, an increase of 127.5% year-on-year, and an increase of 3.5% month-on-month. The market gap of ternary batteries.
Some analysts believe that since 2017, affected by the subsidy policy, the installed share of lithium iron phosphate has continued to decline. However, with the implementation of the new subsidy policy and the promotion of new battery technology, many manufacturers have begun to turn to the use of lithium iron phosphate. Low-cost advantage to seize the market, the reversal of lithium iron phosphate may continue.
Lithium iron phosphate "resurrected"
In October, China’s power battery production totaled 9.86GWh, a year-on-year increase of 47.9%. Among them, the output of ternary battery was 5.5GWh, an increase of 39.6% year-on-year, accounting for 56% of total output; the output of lithium iron phosphate battery was 4.3GWh, an increase of 63% year-on-year, accounting for 43.8% of total output, and the growth rate of lithium iron phosphate output once again exceeded that of ternary batteries. The market share continues to increase.
From 2015 to 2019, China New Energy's (3.810, -0.03, -0.78%) automobile production and sales scale increased from 331,100 to 1,206,000 vehicles, with an annual growth rate of more than 35%. Driven by the sales of new energy vehicles, the demand for upstream power lithium battery products has skyrocketed. The installed capacity of the products has increased from less than 16GWh in 2015 to 62.2Gwh in 2019, an increase of nearly three times.
Although the overall industry trend is upward, from the perspective of market share, in the past five years, lithium iron phosphate battery products have experienced "high driving and low going". In 2015, China's power lithium battery shipments totaled about 15.7GWh, of which lithium iron phosphate battery shipments reached 10.86GWh, accounting for 69.17%, and ternary lithium battery shipments were 4.26GWh, accounting for 27.13%; 2019 China’s installed capacity of power lithium batteries reached 62.2GWh in 2009, but among them, the installed capacity of lithium iron phosphate was 20.2GWh, a year-on-year decrease of 9%, accounting for 32.5% of the total installed capacity, and the installed capacity of ternary lithium batteries reached 40.5GWh, a year-on-year increase of 22.5 %, accounting for 64.8%, the market share of lithium iron phosphate is greatly overtaken by ternary lithium batteries.
The main reason for the above changes is the adjustment of the past subsidy policy. The subsidy policy has always been crucial to the development of the new energy vehicle market. In December 2016, four ministries including the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the Development and Reform Commission jointly issued the "Notice on Adjusting the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles", which for the first time put forward specific requirements for the energy density of new energy vehicles. Energy passenger vehicles require that the mass energy density of the power battery system of pure electric passenger vehicles is not less than 90Wh/kg, and subsidies are 1.1 times higher than 120Wh/kg.
Huaan Securities (6.740, 0.00, 0.00%) believes that the subsidy policy is aimed at “supporting the strong and the strong”, with increased operating mileage, battery system energy density, and stricter power consumption per 100 kilometers; driven by the subsidy policy, high endurance High-quality products with mileage continue to appear, but the share of lithium iron phosphate continues to decline due to the inferior energy density of the battery system.
Affected by subsidy policy factors, starting from 2016, the growth rate of lithium iron phosphate shipments began to be significantly lower than the growth rate of ternary lithium battery shipments.
In April 2020, the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the Development and Reform Commission once again jointly issued the "Notice on Improving the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles" (hereinafter referred to as the "Notice"). The "Notice" proposes that the implementation period of the new energy vehicle promotion and application of the fiscal subsidy policy will be extended to the end of 2022, and the subsidy standard for 2020-2022 will be reduced by 10%, 20%, and 30% on the basis of the previous year. The above subsidy policy will start from 2020. It will be implemented on April 23, 2010, and will be the transition period to July 22, 2020.
Compared with the previous subsidy policy, the "Notice" first proposed that after the transition period, the price of new energy passenger vehicles before subsidies must be less than 300,000 yuan (including 300,000 yuan), which means that models with a price of more than 300,000 yuan Will not be able to enjoy subsidies. At the same time, the "Notice" also set the upper limit of the annual subsidy of 2 million vehicles and the threshold for increasing the mileage of subsidized vehicles to 300 kilometers.
Huaan Securities pointed out in a research report that in 2016 and 2017, the price of cobalt and lithium, the upstream raw material for ternary lithium batteries, rose sharply, which drove the dramatic fluctuations in the prices of ternary materials and lithium cobalt oxide. In contrast, although the energy density of lithium iron phosphate is lower than ternary, it has a stable structure, good cycling and safety performance, and is a very cost-effective cathode material. Under the current subsidy program, lithium iron phosphate has regained its economic advantage. After considering subsidies, significant cost reductions can still be achieved. Lithium iron phosphate is expected to return to the power market with a strong price/performance ratio.
According to Huaan Securities, the current cost of using lithium iron phosphate is about 0.08 yuan/Wh, and the cost of using ternary materials 811, 622 and 523 is 0.29 yuan, 0.24 yuan and 0.23 yuan/Wh, respectively. Based on the above data, the use of lithium iron phosphate on the positive electrode can save about 0.15 yuan-0.21 yuan/Wh in the use cost, corresponding to a 65%-72% reduction in the cost of the positive electrode. Even considering the extreme calculation of the cobalt-free and ternary price drop significantly, the use cost of lithium iron phosphate is still significantly better than the ternary battery, with 55% and 22% cost reduction advantages at the positive electrode and battery cell levels, respectively.
Calculated on the basis of a passenger car model with a charge of 55kWh and a battery life of 405km, the cost of changing the battery from the three yuan to the iron-lithium version has decreased by 6900-13,500 yuan, a drop of about 13%-27%; after considering the difference in subsidies, iron-lithium The cost of the version can still be reduced by 4,600 yuan to 5,600 yuan, which is equivalent to a decrease of 9%-11%. Lithium iron phosphate regains its economic advantage and realizes a significant cost reduction.
In fact, the impact of changes in subsidy policies on the demand for lithium iron phosphate has been directly reflected on the model level. On September 22, the Ministry of Industry and Information Technology issued the 336th batch of "Announcement on Road Motor Vehicle Manufacturers and Products" (hereinafter referred to as "Product Announcement"). According to the "Product Announcement", among the 253 new energy vehicle products declared, up to 206 models are equipped with lithium iron phosphate batteries, accounting for 81.4%. The significant increase in the proportion indicates that lithium iron phosphate batteries are further accelerating their return to the field of new energy vehicles.
During the National Day in 2020, Tesla announced the price adjustment of its Model 3 products. The price of the upgraded version of the standard battery life is 249,900 yuan after the subsidy, and the price of the long-lasting rear-wheel drive version is 309,000 yuan after the subsidy, the highest drop is more than 40,000 yuan. Industry analysts said that the high probability of Tesla Model price adjustment is because the company's new car will be equipped with lithium iron phosphate batteries produced by CATL (339.850, 17.62, 5.47%).
In addition to Tesla Model 3, BYD (204.910, 7.64, 3.87%) Han EV, Wuling Hongguang MINIEV, BAIC EC/EU series, SAIC-GM-Wuling Baojun E series, Changan Auchan, Hezhong New Energy Nezha series, etc. Passenger cars have also launched models with lithium iron phosphate batteries.
New technology "make up for shortcomings"
In addition to cost advantages, the battery life improvement brought about by the promotion of new battery technology has also added a "new fire" to the popularity of lithium iron phosphate.
In March 2020, BYD released a brand-new lithium iron phosphate battery product "blade battery", claiming to have higher stability than ternary batteries while increasing energy density. It was once considered by the market to be the "end of ternary batteries". By".
According to relevant information disclosed by BYD, the "blade battery" can achieve a system energy density of 160Wh/kg on the basis of ensuring safety. Corresponding to BYD's "blade battery", the industry "leading" Ningde era chose the "CTP" (Cell to Pack) solution based on the "module-free" technology path.
Huaan Securities pointed out in the research report that the traditional battery pack is a battery module formed by a combination of battery cells and metal cover end plates, wire harnesses, adhesives, conductive adhesives, and module control units. Form a battery pack (Pack). In such a three-layer structure, the module plays the role of protection and support and integrates the battery cell, and also helps with temperature control and easy maintenance. However, the existence of the module reduces the space utilization rate of the entire battery pack, resulting in a higher efficiency of the group. low.
The two solutions of BYD and CATL have the same effect. In essence, they achieve the effect of increasing energy density and reducing cost by increasing the volume utilization rate and simplifying the battery pack structure. The main difference is that the technical core of the "blade battery" is Large-size batteries, and the focus of "CTP" is to simplify the module structure.
According to Huaan Securities' calculations, the "blade battery" based on the lithium iron phosphate system can increase the volume utilization rate by more than 50% and reduce the manufacturing cost by 30%. Take BYD Han's EV pure electric, which was the first to use the "blade battery" solution, as an example. Its high-performance version and long-endurance version of NEDC have increased their cruising range to 550km and 605km, respectively.
At the same time, due to the elimination of module wiring harnesses, cover plates and other components in CATL’s CTP technology, the number of parts in the entire battery pack has been reduced by 40%, production efficiency has increased by 50%, and system energy density has increased by 10%-15%.
Iron Lithium "New Space"
According to Huaan Securities' estimates, under different scenario assumptions, China’s lithium iron phosphate battery shipments will reach 217-532GWh by 2025, corresponding to a 6-year compound growth rate of 35%-56%. Among them, under the neutral assumption, it is estimated that by 2025, the shipment of lithium iron phosphate batteries will reach 343GWh. Specifically, by 2025, the global sales of new energy vehicles will reach 15 million, the penetration rate of lithium iron phosphate is close to 20%, the corresponding power battery shipment is about 188GWh, and the battery end market space is about 171.3 billion yuan, corresponding to phosphoric acid. The market space of iron-lithium cathode materials is about 24.2 billion yuan.
At the same time, Huaan Securities also predicts that by 2025, China's non-power battery market space is expected to reach 155GWh.
According to relevant data, as of 2019, China's lead-acid battery production is about 202.5GWh, accounting for nearly 40%. The energy density and cycle life of lithium iron phosphate batteries can reach four times that of lead-acid batteries. The price is approaching the lead-acid battery, and lithium iron phosphate is expected to seize the lead-acid battery market share.
According to Huaan Securities' calculations, by 2025, the replacement scale of lithium iron phosphate in the field of lead-acid batteries may reach 82GWh. In addition, the application of lithium iron phosphate in the fields of base stations, energy storage, and electric ships will reach 10GWh, 28GWh and 35GWh, respectively.
