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a person familiar with the matter said the fire started on a mass production test line. zeng yuqun said the impact was not significant.

text丨li zinan
editor丨gong fangyi

at noon on september 29th,ningde eraa fire broke out at the z base of the production workshop in jiaocheng district, ningde city, fujian province. an engineer saw smoke starting to come out of the factory at 11:40 noon in the employee dormitory opposite base z. half an hour later, open flames could be seen on the roof of the factory.

"because the national day holiday is approaching, a considerable number of engineers have chosen to take leave today." he said that most of the staff at base z have evacuated and said that no casualties have been found yet.

as of press time, ningde times and ningde local officials have not disclosed the cause of the accident, and there is no news yet that the fire has been extinguished. in the evening, the chairman of catl responded to jiemian news and said, "the problem is not big."

z base wasteslaproduction of batteries,half a year ago it was the most advanced lithium battery production base in the world.

the local fire department reported in the afternoon that a fire broke out in an independent building (an area of ​​about 15,000 square meters) in the ningde times factory. the fire department and related departments have begun emergency rescue operations, and there have been no casualties yet.

as far as we know, the z base has two production workshops, z1 and z2. the z2 workshop has 6 production lines. when a single line is at full production, it can produce 30,000 batteries per day. the monthly production capacity is enough to assemble about 50,000 tesla models. 3.

in addition to production personnel, some of catl's overseas business project teams also work here, and their work may also be affected.

base z broke ground in 2019 and completed ramp-up of production capacity in 2022. the annual production capacity of the entire base exceeds 30 gwh. base z is catl’s seventh-generation production line. catl has deployed the entire company’s backbone of equipment and process engineers to participate in the construction.

before the eighth-generation production line was put into operation at the end of last year, base z was the most proud factory of catl, and it was probably the battery factory with the highest technical level in the world at that time. due to its extremely high level of intelligent manufacturing, base z was named a "lighthouse factory" by the world economic forum in 2021, making it the first "lighthouse factory" in the global battery industry.

catl executives have repeatedly emphasized in public that the production capacity of the z base is significantly ahead of the industry, and the outflow rate of defective batteries is less than one billionth. that is, for every 1 billion batteries produced by the z base, less than 1 defective item.

by the end of last year, the z base's production yield exceeded 94.5%, at least 5 percentage points higher than industry competitors.

we have previously introduced that an guoping, the head of the z base, was promoted to the head of catl’s overseas manufacturing base three months ago. the person currently responsible for the manufacturing operations of catl’s domestic factories is huaxia. they all report directly to the chairman of catl.zeng yuqunreport directly.

as of press time, catl has not responded to our request for comment.

the cause of the fire is unknown,engineers speculated that the fire started in the chemical processing workshop

most lithium battery engineers are familiar with fire accidents. lithium batteries are inherently flammable, and one-third of the processes in the battery production process have the possibility of catching fire.

a single battery can catch fire due to being dropped, deformed, or overcharged, but a dry powder fire extinguisher can handle a single battery fire. a catl supplier engineer told us that there was a fire accident at the z base in 2022, but because it was discovered in time, the engineer put out the fire himself without alerting the fire brigade.

most fire incidents experienced by engineers have only two causes. the first is that the equipment did not detect a bad battery, causing the battery to spontaneously ignite while being stored in the warehouse.

the production line of catl's z base has more than 6,800 quality monitoring points. these monitoring points are a guarantee. equipment such as ccd cameras will detect impurities and defective products in the battery and discharge the defective products in the appropriate process. after each battery is manufactured, it will undergo another scanning and charge and discharge inspection.

the second is that the battery's capacity dividing equipment has not been repaired for a long time or is in the transition period of product replacement, overcharging and discharging the battery, causing the battery to spontaneously ignite.

many engineers we contacted said that if the production site personnel of catl had discovered the fire in time, the fire would not have burned through the ceiling of the factory. "what is certain now is that some of the finished batteries produced by catl caught fire, so the fire has not been extinguished yet," an engineer said.

a former engineer who worked at catl for 3 years said that catl is the company that pays the most attention to production safety in the industry. without affecting production efficiency, catl tends to purchase production equipment with built-in fire extinguishing functions to eliminate most of the accident. a production squad leader told us that catl provides safety training to production staff every week, and special inspections are conducted to assess the training results.

ningde times has not yet announced the preliminary conclusion of the accident. many catl engineers we contacted speculated that the fire broke out in the sub-condensation and formation workshops of the z base. the liquid injection process before volume separation and formation will inject electrolyte into the battery, and the battery will not be energized until the liquid is injected. the volume separation and formation processes usually take several days. during these two processes, the battery undergoes charge and discharge, static electricity removal, and rest to allow the chemicals in the battery to fully react.

formation and volume separation are also the last few processes in lithium battery manufacturing. after the battery undergoes these two processes and quality inspection, it will enter the warehouse. the formation and volume separation workshop is usually close to the finished battery warehouse. a fire in the formation workshop can easily ignite the warehouse. .

in june 2023, a fire broke out at the power battery factory of south korean battery company sk on in yancheng, jiangsu province due to a failure in the formation process. the local fire department said the cause of the accident was a failure of battery charging and discharging equipment.

fire areas require expensive reconstruction,but it has little impact on production capacity

a person familiar with the matter told us that the fire mainly involved catl’s mass production test line and had “little impact” on catl’s production capacity. in the first half of this year, catl's capacity utilization rate has dropped to 65.3%, and there is ample idle capacity.

the key production equipment and process control data of the z base have not been lost. all the factory production equipment of catl has been connected to the internet. he can quickly rebuild the production line and debug the equipment based on the original data.

but the ningde era will most likely need to rebuild nearly one-third of the process after the entire z2 base is formed. it is still unclear whether the equipment used in the process before the formation can continue to be used.

lithium battery production has extremely high requirements on space cleanliness, humidity, and temperature. any impurities larger than 50 microns in the air will cause the battery to short-circuit, fire and explode if it is drawn into the battery. catl requires battery production lines to be as clean as a heart bypass operating room. a serious fire can destroy the entire production workshop environment. this accident may not only destroy the charred equipment, but also affect the accuracy of other production equipment.

as far as we know, as of the end of 2023, excluding factory and land costs, catl's production line investment cost is 170 million yuan/gwh. based on this estimate, the equipment investment in the entire z2 base is about 2 billion yuan. based on the 7-day formation and volume separation time, catl may lose about 1.3 million finished batteries. these batteries can assemble 13,000 tesla model 3 vehicles, and the production cost exceeds 300 million yuan.

there are also potential market cap fluctuations. on january 7, 2021, a fire broke out at bump cycle, a subsidiary of catl, due to improper storage of production waste. the market value of catl evaporated by 50 billion yuan the next day. considering that this accident occurred in a factory that produces batteries rather than a factory that recycles battery waste, the impact on catl's share price performance may be greater.

production accidents occur every year in the battery industry. in june this year, aricell, a korean company that supplies batteries to samsung and other companies, had a production accident, and 23 people were killed in the accident. south korean police later claimed that aricell had problems such as improper installation of emergency exits and inadequate safety training, and claimed that aricell was in a "safety vacuum" state at the time of the incident.

given catl’s leading position in the global power battery market, the outside world has reason to believe that this accident was just an accident and not a systemic problem. but precisely because catl has reached today's scale, the industry and market may not just regard it as an accident.