2024-07-23
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Written by｜Wu Xue
The construction of the Ningde Times New Energy Life Plaza in Chengdu's Tianfu New District has basically been completed in early July. On August 10, the first offline brand display store in China built by Ningde Times will officially open.
In this 15,000-square-meter new energy vehicle store, CATL will fully display its "CATL Inside" series of vehicles. In the future, it is expected that the number of exhibited vehicles here will reach 150, involving more than 50 models from more than 20 automakers.
This is also an important step in CATL's to C marketing this year.
Since the release of the “affordable” lithium iron phosphate supercharger battery in August last year, CATL’s marketing has taken a “people-friendly” approach – billboards at airports and train stations, frequently updated social media accounts, and live science broadcasts targeting ordinary consumers…
As some media commented, today's CATL is "turning power batteries, which were originally industrial products, into the role of consumer products."
The outside world generally believes that CATL's change in strategy is mainly due to operational pressure.
Due to the slowdown in the growth of new energy vehicle models and the increase in competitors, although CATL's annual installed capacity is still growing, its production line utilization rate has begun to decline since last year.
This is not a challenge faced by CATL alone. As the industry leader, it is already one of the most secure companies in the industry. Second- and third-tier battery companies behind it are in even greater danger.
[The battery industry is also engaged in price wars]
Data shows that in the first half of this year, my country's new energy vehicle production increased by 1.141 million units year-on-year. The total volume is still growing, but the growth rate has dropped from 41.1% in the same period last year to 28.9% today.
As the growth rate of new energy vehicles, especially pure electric vehicles, has slowed down significantly, the growth of power batteries is no longer as rapid as expected.
In the first half of 2024, the cumulative installed capacity of power batteries in my country will be 203.3GWh, a year-on-year increase of 33.7%. In the same period of 2023 and 2022, the growth figures will be 36.8% and 109.8% respectively.
In the past high-speed growth stage, power battery production capacity experienced a wave of rapid expansion. When the growth rate slowed down significantly, backlash followed.
According to data released by Xinlang Information, the average capacity utilization rate of domestic battery manufacturers will be only 36% in 2023. In contrast, the automobile manufacturing industry, which has been dissed for having overcapacity, has a capacity utilization rate of 74.6%.
At the 2024 China Automotive Chongqing Forum held in June,Changan AutomobileChairman Zhu Huarong once said that by 2025, China's automotive industry will need about 1,000GWh of power batteries a year, but the industry's current planned production capacity has reached 4,800GWh.
That is to say, if the current development continues, the capacity utilization rate of my country's power battery industry will continue to decline to around 20% by 2025.
The decline in capacity utilization is accompanied by a drop in battery prices.
By June this year, the price of soft-pack ternary power battery cells has dropped from 1.15 yuan/Wh at the end of 2022 to 0.47 yuan/Wh; the price of square ternary power battery cells has dropped from 1.1 yuan/Wh to 0.4 yuan/Wh; and the price of square iron-lithium power battery cells has dropped from 1 yuan/Wh to 0.32 yuan/Wh.
This is certainly due to the decline in lithium carbonate prices, but more importantlyIn order to seize the market, companies have begun to spare no effort to "lower" prices.
The price of 0.3 yuan/Wh has already reached the cost price of many battery companies.
According to previous estimates by Soochow Securities, with the current lithium carbonate price of 80,000 yuan/ton, the cost of iron-lithium batteries for leading battery companies is exactly about 0.32 yuan/Wh, the cost for second-tier battery manufacturers is about 0.37/Wh, and the cost for third-tier battery manufacturers is more than 0.4 yuan/Wh.
This means that under the current "price war" in the power battery industry, second- and third-tier battery companies are basically losing money.
This is indeed the case.
On July 16, Xinwanda, which has been deeply involved in the battery field for a long time, released its first-half financial report. Thanks to the recovery of the consumer electronics market, Xinwanda's battery shipments in this field have increased, and profits have also increased by double digits year-on-year. But the power battery business in another sector is far less impressive. Between 2020 and 2023, Xinwanda's power battery sector losses have expanded year by year, and it has lost 500 million yuan in the first quarter of this year alone.
The same is true for Repulan, a battery "dark horse" backed by the "global nickel king" Tsingshan Group. In the past four years, its annual losses have increased from more than 50 million in 2020 to nearly 2 billion in 2023.
It is not just domestic battery companies that are facing huge pressure of losses. Foreign battery companies are finding it even more difficult to survive.
Recently, SK Group, the second largest company in South Korea, announced that it will reorganize its energy business and merge its subsidiaries SK Innovation and SK E&S. The purpose of this adjustment is to alleviate the difficulties faced by SK Innovation's battery business. Prior to this, SK Innovation had suffered losses for 10 consecutive quarters and had a debt of 82.2 billion yuan.
The revenue and profits of LG Energy Solution and Samsung SDI, two other battery companies in South Korea, have also fallen sharply this year. According to analysts at Hyundai Motor Securities, one of the important reasons is the continuous decline in battery prices.
[ The car companies that entered the market fell into a deep pit ]
More than a year ago, due to the high price of batteries, many car companies had plans to develop their own batteries to reduce costs. However, as prices fall, many car companies have begun to slow down their plans:
At the end of last year, the company planned to launch its own battery by the end of 2024 to ease cost pressure.NIO,AnnounceDelaying battery mass production nodes;
XiaopengRecruitment by the end of 2022BMWAfter the former senior battery engineer formed a self-developed battery team, there was no further news;
In Europe, including Volkswagen, Stellantis andBenzSeveral companies, including , are also scaling back or re-evaluating their battery projects...
The research and development and production of power batteries require huge cost investment. "Every profession has its own specialization." If car companies do not have rich technical accumulation and start from scratch, they will obviously not have as obvious advantages as battery companies.
Even if the R&D capability is strongTesla, and the development of its own batteries has not been smooth.
Musk has been betting on 4680 batteries for five years and has invested billions of dollars but has not been able to put them into mass production and installation. Recently, it is said that Tesla's battery technology has made some progress, but whether it can maintain its cost leadership remains uncertain.
It can be said that in the current power battery field, the most cost-effective ones are still CATL andBYDThe product.
Data previously showed that if a power battery company wants to achieve profitability, its annual output must reach at least 25GWh. If it wants to achieve a relatively ideal operating efficiency, it must reach 40GWh. And if it wants to truly have a competitive advantage in the market, 100GWh is the minimum threshold.
The number of new energy vehicles corresponding to these three stages is about 350,000, 600,000 and 1.5 million respectively. Currently, there are not many car companies that can achieve this sales volume.
Many car companies have built their own battery factories and are also actively exploring external partners.Great WallHoneycomb Energy is one of the representatives;auspiciousThe same is true for its subsidiary Yaoning New Energy; although its first Shield Dagger battery was firstGeely GalaxyHowever, its commercial battery company Anchi Technology has already cooperated with many external car companies such as FAW, Changan, and Kaima...
It can be seen that car companies that develop their own batteries are still following a development path similar to that of battery companies.It is just easier to succeed in the initial stage because of the support of orders from the parent company.
[ The cycle happens frequently, but fewer and fewer people survive]
Regarding the current overcapacity, financing difficulties, and price involution in the power battery industry, Yang Hongxin, Chairman and CEO of Honeycomb Energy, once mentioned:Everything originated from the big push in 2021, and the "overcapacity crisis will last at least until 2025"。
In fact, in the past decade or so, the power battery industry has undergone several adjustments:
At the end of 2023, Jiewei Power, a well-established power battery company with a history of more than ten years, announced the suspension of work and production.Year 2009When it was founded, the power battery industry was in its first bonus period.
That year, in order to promote the development of new energy vehicles, my country launched the "Ten Cities, Thousand Vehicles" pilot program. Since then, with the rise of the new energy vehicle industry, the development of power batteries has also begun to accelerate.
In 2015, my country's new energy vehicle sales jumped from 74,800 units in the previous year to 330,000 units. Correspondingly, the installed capacity of power batteries also increased from 3.7GWh in 2014 to 15.7GWh.
But the good times did not last long. Between 2016 and 2017, raw materials such as lithium carbonate and electrolytic cobalt experienced a wave of price increases, which led to a general decline in the gross profit margins of battery companies. In addition, due to the backward technology level of some companies, their products could not be installed on vehicles.
Data shows that during this period, the number of my country's power battery companies dropped directly from 217 in 2016 to around 130 in 2017.
In 2018, after a period of adjustment, the installed capacity of power batteries increased by more than 50% again. However, this growth did not last long.
In the second half of 2019, my country's new energy vehicle sales fell for the first time in a decade. Affected by this, power battery companies are also not doing well, with installed capacity falling year-on-year for five consecutive months. By this year, there were only more than 60 battery companies left in the market. The subsequent suspension of production caused by the epidemic made the situation of many companies even worse.
Until 2021, power batteries once again entered an unprecedented period of crazy development. The continuous influx of "hot money" and the continuous expansion of production capacity have enabled many battery companies to experience more than two years of rapid development. Until 2023, hidden worries began to emerge.
According to Yang Hongxin's prediction, by the end of this year, the number of power battery companies remaining in the market may not exceed 40, and the next two years will still be a stage of accelerated elimination.“The competition in the entire industry is no longer about competing for market share, but about the opportunity to survive.”
Just like the elimination round among vehicle manufacturers, the survival story of power batteries is also unfolding cruelly.
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