In less than a month, Yiwei Lithium Energy has expanded the production of lithium iron phosphate batteries for passenger cars twice, and the investment amount has reached 4.9 billion yuan.
On March 10, Yiwei Lithium Energy announced that in order to meet customers’ increasing product demand and the company’s future business development needs, Huizhou Yiwei Power Battery Co., Ltd., a subsidiary of the company, intends to use its own and self-raised funds to invest in the construction of "passenger" "Car Lithium-ion Power Battery Project (Phase II)", with an investment of no more than 3.9 billion yuan. The construction content of the project is a square lithium iron phosphate battery with a construction period of no more than 18 months and an area of about 175 mu.
On February 19, Yiwei Lithium also announced that Huizhou Yiwei Power intends to use its own and self-raised funds to invest in the construction of "Passenger Vehicle Lithium-ion Power Battery Project (Phase I)" and "xHEV Battery System Project ( Phase I)”, the investment amount is no more than 1 billion yuan and 2.6 billion yuan respectively. Among them, the passenger car lithium-ion power battery project (Phase I) includes square lithium iron phosphate batteries and modules; the xHEV battery system project (Phase I) includes 12V and 48V battery systems.
Yiwei Lithium Energy stated that the investment mainly meets the supporting needs of customers such as internationally renowned car companies and new domestic car manufacturers.
Are lithium iron phosphate batteries really "sweet" now? Why did Yiwei Lithium expand its production twice?
Does lithium iron phosphate battery return to the battlefield?
The two technical routes of lithium iron phosphate and ternary lithium battery have always been hotspots discussed in the automotive circle.
In 2016, the shipment volume of lithium iron phosphate was as high as 20GWh, and it gained a firm foothold in the industry with a market share of 73%. Since the country included battery energy density in the assessment criteria, high energy density and long driving range have become the focus of subsidies. For a while, lithium iron phosphate, which is inferior in energy density and cruising range, has encountered "Waterloo".
In the following years, ternary lithium batteries took advantage of the trend and made great strides all the way. According to data from the Battery Alliance, ternary lithium battery shipments in 2019 reached 40.5GWh, accounting for 65%.
But in 2020, with the rapid development of smart cars, the industry and the market have a more rational understanding of electric cars. When charging becomes more and more convenient, they will no longer blindly pursue high battery life, but ensure safety. Under consideration, performance, life, and cost indicators should be taken into consideration.
Moreover, the current module-free or large-module technology of lithium iron phosphate batteries can make the system energy density reach the level of 5-series ternary lithium batteries, and the cost is lower than that of ternary lithium batteries. In particular, subsidies for new energy vehicles have gradually declined, and lithium iron phosphate batteries have begun to return to the battlefield.
The changes in the loading volume of ternary lithium and lithium iron phosphate in 2020 have already explained this trend. According to data from the Battery Alliance, the ternary lithium loading volume in 2020 is 38.9GWh, down 4.1% year-on-year and an increase of 2.2% month-on-month; lithium iron phosphate loading volume is 24.4GWh, an increase of 20.6% year-on-year and an increase of 46% month-on-month. In December 2020, the monthly loading of lithium iron phosphate even exceeded that of ternary lithium.
At the same time, high-end brands such as Tesla and Xiaopeng have added lithium iron phosphate models, which are accelerating the recovery in demand for lithium iron phosphate.
At the end of February this year, Musk publicly stated that due to concerns about the long-term and reliable supply of nickel, the company will consider supporting lithium iron phosphate batteries in more electric vehicles. Nickel is an important raw material for ternary batteries, and lithium iron phosphate batteries do not need to use nickel. At present, Tesla's domestic Model 3 standard battery life version has been switched to lithium iron phosphate batteries.
Xiaopeng Automobile, a new domestic carmaker, also launched P7 and G3 lithium iron phosphate battery versions. NIO is also expected to be equipped with lithium iron phosphate batteries and is currently in preparation for testing.
It is worth noting that in the 342 batches of new car announcements, among the 21 pure electric cars, 13 models are clearly equipped with lithium iron phosphate batteries, and only 6 models are clearly equipped with ternary lithium batteries. Among them, Hongqi E-QM5 and GAC AION Y high-end models will be equipped with lithium iron phosphate batteries.
The Human Securities Research Report predicts that 2021 will usher in a year of growth in demand for lithium iron phosphate, which is expected to increase by 80% year-on-year. Although lithium iron phosphate batteries are difficult to shake the position of ternary lithium in the high-end electric vehicle market, they are becoming a new choice for high-end entry-level models by virtue of their cost and safety advantages.
Various signs indicate that lithium iron phosphate batteries are conquering the ternary lithium battery city.
Yiwei Lithium aims at new opportunities
Yiwei Lithium has entered the power battery field since 2014. At present, soft-pack ternary batteries and square ternary batteries are mainly used in passenger vehicles. The main customers are Geely, BMW, Daimler, Hyundai Kia, Xiaopeng, Nezha Automobiles; square lithium iron phosphate batteries are mainly passenger cars, and the main customers are King Long, Yutong, Geely Commercial, etc.
With the entry of foreign-funded enterprises and the strong expansion of leading enterprises, competition in the field of power batteries has become increasingly fierce. In order to grab market share, Yiwei Lithium began to explore new business growth points.
According to data from the Battery Alliance, the installed capacity of Yiwei Lithium Power Battery in 2020 is 1.18GWh, accounting for 1.9%, ranking seventh on the list. From the 2018-2020 TOP10 list of power battery companies, the installed capacity of Yiwei Lithium Energy is declining. The installed capacity in 2020 has dropped by 28% year-on-year, from fifth to seventh on the list.
At this stage, it is an indisputable fact that the demand for lithium iron phosphate batteries is increasing. Yiwei Lithium aims at new opportunities. In less than a month, it invested twice in the expansion of lithium iron phosphate batteries for passenger cars.
According to public information, the current capacity of the Yiwei Lithium Energy Lithium Iron Phosphate battery is 6GWh, and it will increase to 12GWh by the end of this year. The two phases of Yiwei Lithium Energy Huizhou’s square iron-lithium passenger vehicle project are expected to have a construction capacity of more than 20GWh. Together with Yiwei Power’s existing and planned production capacity, it is expected that it will have a 32GWh square iron-lithium production capacity in 2023.
The research report of Tianfeng Securities pointed out that Yiwei Lithium Energy will benefit from the increase in demand for lithium iron phosphate batteries this year. It is expected that its revenue will be close to 3 billion yuan, a year-on-year increase of about 70%.
Even so, the challenges facing Yiwei Lithium Energy are still huge. You should know that the scale of investment and expansion of peers such as CATL, BYD, AVIC Lithium, and Guoxuan High-Tech is much larger than that of Yiwei Lithium. They want to increase their market share and once again rise to the fifth on the list. Very big.
