The enemies of theCATL era
The battery giant, CATL, whose market value exceeds that of General Motors and Ford combined, has recently felt a challenge, something that has not been encountered in recent years.
In the CATL era, the biggest winner in this wave of car-making has consistently ranked first in the world in terms of installed capacity and market share.
SNE Research, a South Korean market research institution, released the global power battery installed capacity ranking in the first 11 months of 2021. CATL ranked first with 79.8GWh of battery installed capacity, with a market share of 31.8%, far exceeding the second and third places (LG and Panasonic ranked second and third, with installed capacity of 51.5GWh and 31.3GWh respectively)
Since 2022, bad news has come one after another.
36 Krypton reported that Xiaopeng decided to reduce the supply share of CATL and introduce a new battery supplier, Chuangxinhang. Before cooperating with Xpeng Motors, China Innovation Aviation had replaced CATL as the first supplier of GAC New Energy.
Xiaopeng's installed capacity in CATL customers accounts for only 6%, which has little impact on CATL's performance. China Innovation Airlines is not as famous as CATL, ranking third in terms of monthly installed capacity in China, and is preparing to go to Hong Kong for an IPO recently.
But the move sent a clear signal: a challenger appeared.
Another heavyweight competitor is also about to land in the capital market. In early January, LG New Energy, the biggest competitor of the CATL, announced that it would start accepting subscriptions from investors and is expected to be listed in South Korea on January 27. Once LG New Energy is successfully listed, the two are bound to usher in a hand-to-hand battle.
The capital market is no longer popular. Since December 2021, CATL's share price has been falling. Entering 2022, the situation has not improved. As of January 11, the stock price of CATL has fallen 22% from the highest point.
For decades, Ningde era has taken the Iron Throne and dominated the global automotive circle by relying on policy protection, stepping on the air, super production capacity, and binding the upstream and downstream industrial chains. Now, the enemy appeared from all sides.
In 2012, Tesla shocked the world by launching the industry's first electric coupe Model S capable of OTA. Since then, a new energy revolution in the name of "electricity and intelligence" has swept the world.
In China, a man named Zeng Yuqun sensed this change. He bought the power battery department from the Japanese TDK company, named it Ningde Times, and established the company in his hometown Ningde.
Six years later, this battery manufacturer from Fujian has become the world's largest battery giant. Many car companies have cooperated with CATL, including BMW, Volkswagen, Daimler, Tesla, Weilai, Ideal, Xiaopeng, etc. In order to buy batteries from the Ningde era, car giants have to pay huge security deposits, wait in line, and visit the boss in person when necessary.
In May 2021, the Ningde era ushered in a historic moment, the market value exceeded 1 trillion yuan, becoming the first trillion-dollar market value company on the ChiNext. In November, CATL became the leader of A-shares with a market value second only to Moutai.
The battery system is the key to the performance of electric vehicles, and the battery accounts for 35%-50% of the cost of the whole vehicle. If the battery has become the main artery that runs through the entire new energy industry, then there is no doubt that this main artery is now tightly held by the Ningde era.
In the Ningde era, it was held on the throne, and countless people tried to surpass it, but they failed.
For a battery manufacturer, the key to success lies in mass production capacity and control over the supply chain. Volkswagen Group said when it built its own battery factory that in the era of electric vehicles, the importance of scale far exceeds its importance in the era of fuel vehicles.
According to CATL, the production capacity in the first nine months of 2021 is about 106.41GWh. After the lithium-ion battery production line that has been completed and put into operation, the total annual production capacity will reach 220GWh to 240GWh after completing the ramp-up and stable operation. This production capacity far exceeds that of BYD, which ranks second in China.
Since its listing, CATL has begun to pour money into the upstream and downstream industry chains. For more than ten years, the Ningde era quietly built its own empire. From the most upstream lithium mines and lithium salts, to the positive and negative electrode materials of batteries, manufacturing equipment, to automobile-related chips, chassis, automatic driving, and lidar technology, CATL has a layout. Even now, the investment has not stopped. According to the data disclosed by CATL, since the beginning of 2020, the giant has invested a total of 11.9 billion yuan in the upstream and downstream of the industry chain.
Because Ningde era's procurement scale is large, and it is bound to the upstream raw material supply, which is also procurement, Ningde era can get raw materials at a lower price. Huaan Securities pointed out in the research report that the ternary cathode, which accounts for the highest proportion of battery costs, has a price discount of more than 10% compared to other customers in CATL from 2017 to 2019.
As a battery giant, CATL has numerous patents covering all aspects from material system to design and manufacturing.
By opening up the upstream and downstream industry chains and reducing costs, CATL can gain more room for bargaining, and then through continuous investment in research and development, maintain technological innovation and obtain more stable production capacity and scale.
Astonishing production capacity, stable supply chain, and constantly innovative technology, the three together help CATL build an airtight city wall in the battery market, which no car company can bypass.
In 2021, the global new energy market will grow explosively. Domestically, from January to November, the production and sales of new energy vehicles will be 3.023 million and 2.99 million respectively, more than double that of 2020.
The output went up, but the battery was not enough. Factories around the world are running at full capacity, and there are still battery gaps of about 30%-50%.
There may be more gaps in the future. SNE Research previously predicted that by 2023, the global demand for power batteries for electric vehicles will reach 406GWh, while the supply of power batteries is expected to be 335GWh, a gap of about 18%.
"Battery shortage" has become the new Achilles heel of electric vehicles after the "core shortage".
The lack of batteries has stuck the neck of car companies, not only one, but also giants. On the earnings conference call in January 2021, Tesla CEO Elon Musk said that battery supply has become a bottleneck for the popularity of electric vehicles.
Even leading companies cannot meet the needs of OEMs. Zeng Yuqun once revealed that the company's products have a problem of tight supply, and the customer's urging of goods has made him "unbearable."
For car companies in the rising period, especially new car manufacturers, the lack of batteries is almost a fatal blow. But on this fatal issue, OEMs have no right to speak, and it is the battery manufacturers who really have the right to speak and take the initiative.
In April 2021, at the 100th anniversary celebration of Shanghai Jiaotong University, Shen Nanpeng of Sequoia Capital raised a question to Zeng Yuqun: So many car companies need batteries, and your amount has been fixed this year. How will Ningde era allocate batteries?
History is not without a case of replacing battery suppliers. A classic example is that Tesla used to have a good relationship with Panasonic. However, because Panasonic's production capacity could not keep up with Tesla's demand, Tesla finally chose to give up Panasonic and cooperate with CATL.
In 2022, the replacement will come again, but this time it may be replaced by the Ningde era.
OEMs look for Plan B. The battery players who have been suppressed by "Ning Wang" finally ushered in an opportunity.
There are more than one siege of the Ningde era, and the overseas enemies are the most aggressive.
LG New Energy, the global power battery installed capacity has long occupied the second place, and the biggest opponent of the Ningde era has recently resorted to a big killer-IPO listing.
In December 2020, LG New Energy was spun off from LG Chem and began to develop independently. A year later, LG New Energy launched its first IPO in South Korea, preparing to go public on January 27. According to the Wall Street Journal, LG New Energy will be valued at between $51 billion and $59 billion. This will be the largest IPO in South Korea's history.
In the prospectus, LG New Energy plans to invest part of the funds in the research and development of new products, as well as the establishment of smart factories to improve product quality and technology, and the rest of the funds will be used for production expansion.
After the listing, LG New Energy, which has the help of capital, may become the most difficult enemy in the Ningde era.
The leading players in the global power battery market are mainly concentrated in China, Japan and South Korea. South Korea's LG New Energy and Japan's Panasonic are heavyweight players in the battery industry. In the Ningde era, being able to overtake in a corner and grow into a battery giant has a lot to do with the protection of policies.
In 2015, the Ministry of Industry and Information Technology issued the "Automotive Power Battery Industry Standard Conditions". New energy vehicle subsidies can only be enjoyed by new energy vehicles on sale that are equipped with qualified power batteries and are included in the prescribed list, which is called the "white list" policy in the industry.
This document directly shut out international giants such as LG Chem and Samsung. The policy restricts the production of automobile power batteries by wholly foreign-owned enterprises, which creates a unique development environment for domestic power battery enterprises. In 2019, the document expired, and overseas battery companies finally had the opportunity to enter the Chinese market.
In recent years, LG New Energy has grown rapidly. LG New Energy's global installed capacity in 2020 will be 33.5GWh, which is very close to the 34.3GWh of CATL. On January 10, 2022, LG New Energy announced to the public that considering LG's backlog of battery orders, its global market share is expected to surpass that of CATL.
Domestic snatchers have also surfaced one after another, and the biggest snatcher is BYD.
The global power battery players are automatically divided into two major technical schools - lithium iron phosphate and ternary lithium. Both have their own advantages and disadvantages. BYD chooses to bet on lithium iron phosphate, while CATL is better at ternary lithium. For a long time, ternary lithium batteries have become the mainstream choice of the majority of car companies due to their low temperature resistance and high energy density.
It is also with the tuyere of ternary lithium batteries that Ningde era stepped on BYD, the leader in the field of lithium iron phosphate batteries.
Who would have thought that in 2021, subsidies in the new energy vehicle market will drop significantly, raw materials will rise sharply, and lithium iron phosphate batteries will return to the forefront. BYD also ushered in its own era again.
In the past, both in terms of installed capacity and market share, BYD and CATL had a lot of gaps. In November 2021, the installed capacity of CATL will reach 11.45GWh, and the installed capacity of BYD will be 3.46GWh. But BYD's production capacity is rapidly increasing: 2.8GWh in 2019, 3.88GWh in 2020, and 13.4GWh from January to September 2021.
In 2020, BYD launched the "blade battery", which adopts the CTP grouping method to increase the energy density by 50%, but the price is only two-thirds of the Ningde era 811 ternary lithium battery.
Many OEMs are optimistic about blade batteries and have begun to extend olive branches to BYD. According to the Financial Associated Press, BYD may supply blade batteries to Tesla in the second quarter of 2022.
The "Warring States Period" is Coming
In order to take the initiative, the wealthy car companies began to choose to walk on "two legs", not only cooperating with battery factories for research and development, but also choosing to build their own factories. For example, Volkswagen plans to invest 3.5 billion yuan to build its own battery factory, and at the same time announces investment in the domestic second-tier brand Guoxuan Hi-Tech.
For another example, on the one hand, Tesla is looking for new battery partners, and on the other hand, it is rapidly building its own battery factory. The current total investment is about 5 billion euros (about 38.1 billion yuan). After the completion of Tesla's battery factory in Germany, it may become the largest battery factory in the world, with an annual production capacity of 100GWh.
Relatively less expensive car companies, began to look for new partners.
Xiaopeng is preparing to introduce a new main battery supplier, Chuangxinhang, and Weilai also chooses to develop semi-solid batteries with Weilan New Energy.
In addition to BYD and Ningde era, there are actually a large number of second-tier battery manufacturers lurking in China, such as China Innovation Airlines, Guoxuan Hi-Tech, Yiwei Lithium Energy, Funeng Technology, Xinwangda, Ruipu Energy, Honeycomb Energy and so on.
These second-tier teams have been suppressed and innovated by the Ningde era for a long time, giving them the possibility of overtaking in corners.
In addition to conventional lithium iron phosphate and ternary lithium batteries, the second-tier battery manufacturers can provide more differentiated battery technologies in terms of battery materials, battery structure, and battery safety.
Funeng Technology has developed a soft pack battery with an energy density of 330Wh/kg, which can be cycled more than 1,500 times; Yiwei Lithium's current 300Wh/kg battery technology can achieve a cycle life of more than 3,000 cycles at room temperature; Launched 350Wh/kg power battery products that can be mass-produced within the year...
Willing to innovate in technology and able to actively meet the needs of OEMs, the second echelon has gradually been recognized by OEMs.
Perhaps there is a case of "the stock price has risen 20 times in three years" in the CATL era. Recently, capital has also turned its attention to battery manufacturers such as China Innovation Aviation, which have begun to emerge.
The official website of the China Securities Regulatory Commission recently posted news that China Innovation Airlines has submitted a prospectus, and the scale of listing and fundraising is 1 billion US dollars. Honeycomb Energy, a subsidiary of Great Wall Motors, has also implemented three rounds of financing since 2021 and is preparing to go public recently.
With capital investment, second-tier battery companies are accelerating their expansion. Since 2021, according to incomplete statistics from the media, power battery companies such as BYD, Guoxuan Hi-Tech, Yiwei Lithium Energy, and Honeycomb Energy have announced nearly 30 battery expansion projects, with a total investment of more than 300 billion yuan.
According to BOC Securities, based on the sales of new energy vehicles, the demand for power batteries in China and the world is expected to reach 500GWh and 1020GWh by 2025, and 1100GWh and 2600GWh in 2030, and the market scale will be further expanded.
The Ningde era family is not enough to monopolize such a huge market.
Wang Chuanfu, chairman of BYD, pointed out at the beginning of 2021 that 2021 will be the first year of the rapid development of electric vehicles in my country, and the adjustment of the industry pattern will be accelerated.
Now it seems that the "Warring States Period" belonging to the power battery industry has also arrived. The Ningde era, which occupies half of the battery market, not only has to face the competition from Japanese and Korean companies and domestic second-tier battery manufacturers, but also has to face the potential threat of self-built battery factories by car companies.
At present, the technology of power batteries is not yet mature. Academician Chen Liquan, Zeng Yuqun's mentor during his doctoral period, once publicly stated that the future development direction of batteries is nothing more than two paths: one is the road of solid-state batteries, and the other is sodium ion. battery road.
But there is still a long way to go to the end. Ouyang Minggao, academician of the Chinese Academy of Sciences and vice chairman of the China Electric Vehicle Association of 100, pointed out that solid-state batteries will be put into large-scale commercial applications approximately between 2025 and 2030. He pointed out that lithium-ion batteries will last a long time.
