Rise, Game, "War Within Three Kingdoms": The "Midfield War" Of Electric Vehicle Batteries

In June 10, 2020, the young Tesla went beyond the century old TOYOTA. Its stock price once exceeded 1000 US dollars, and it was the first holder of the market value of the global car companies. This is a memorable day for the auto industry. A new era of electric vehicles has arrived.

However, Tesla, a year ago, was not as good as it is now. At that time, Tesla's share price had fallen below $200 for a while, and almost lost its trust in the capital market. Although Tesla has launched a more popular Model 3, and has harvested a large number of orders. However, sales volume has not been able to keep pace with the delay in capacity.

The main reason for restricting capacity is Tesla's sole battery supplier Panasonic. Musk directly accused Panasonic on twitter, saying that due to the poor production efficiency of Panasonic, it restricted the production of Model 3. Matsushita CEO Jinhe he Hong is bluntly speaking, because musk constantly squeezes costs, requiring Panasonic supply of power batteries continue to depreciate. Iron Man musk was stuck in the throat, and the contradiction between the two sides intensified at once, and the relationship dropped to freezing point.

At the end of 2019, Tesla Shanghai plant was put into operation. Panasonic is no longer the only option for Tesla. Tesla first joined hands with LG, a South Korean battery maker, and will start using batteries from Ningde's local enterprises in July.

The cooperation with Tesla led to a small climax in the stock market of Ningde (300750.SZ). As of June 24th, the Ningde era received 171.5 yuan, and its market value was as high as 378 billion 520 million yuan, which was 7 times higher than the issue price of 25.14 yuan when it was listed on the gem two years ago. The market value of the Ningde era is two times that of SAIC, the largest car company in China.

Founded in 2011, the Ningde era has grown with the rapid development of China's new energy vehicles in the past ten years, gaining market dividends. The success of the Ningde era has also enabled BYD to see the great potential of power batteries, BYD's idea of changing the strategy of opening and adjusting, and the introduction of blade batteries in 2020.

Power battery is the "heart" of electric vehicles, occupying more than 1/3 of the cost of an electric vehicle. Electrification is the trend of the global automotive industry. In the next ten years, with the growth of the global electric vehicle market, the battery industry will also go to a wider blue ocean.

In 2019, the Ningde market gained 41.6% of the domestic market share by 31.46GWh, occupying half of the market. However, whether BYD's counterattack, the war between Japan and South Korea battery, or the host plant's strategic change and the contention of the technology line will make the competition in the battery industry more white hot. The pattern has not yet been decided. The battery battle has already started.

The pattern of market competition has been preliminarily formed. -IC photo

The rise of the Ningde Era

The rise of the Ningde era can not be separated from the "white list of power batteries" issued by the Ministry of credit in 2015. This list will keep the battery from Japan and South Korea in the directory of electric vehicle subsidies. Many domestic vehicle manufacturers have abandoned the use of cheap and certain quality assurance of Japan and South Korea batteries, Ningde era and BYD and other domestic battery enterprises, quickly become the market's "meat and potatoes".

At that time, the supply of domestic power batteries was very intense, and many new energy vehicle companies could not buy good batteries for a time. The shortage of high quality power batteries gave BYD an opportunity to see that BYD's chairman, Wang Chuanfu, closed the outlet for power battery exports to ensure the new energy vehicle's leading position in the market.

This has gained competitive advantages for BYD's new energy vehicles. BYD is not only short of batteries, but also superior to average quality.

In fact, there were new energy vehicle companies looking for BYD to explore the possibility of power battery sales, but BYD refused. "At that time, power battery capacity must be given priority to ensure self support." A senior BYD executive told the twenty-first Century business report.

This closed strategy has made BYD's new energy vehicle sales grow rapidly. But at the same time, it has also achieved the Ningde era. In the past two years, the volume of shipments and installed capacity in Ningde has greatly increased.

In 2016, Ningde's power battery shipments were 6.72GWh, ranking third in the world, after Panasonic and BYD. By 2017, shipments in Ningde increased by 73% to 11.8GWh, becoming the number one in the world.

Another important reason why the Ningde era can surpass big brother BYD is in the choice of technology.

Over the past ten years, power batteries have undergone two times dominated by lithium iron phosphate and three lithium batteries. In brief, the lithium iron phosphate battery has high thermal stability, safer, lower cost and longer service life, but the disadvantage is that the battery has low energy density and poor endurance. Three yuan lithium battery, on the contrary.

With the progress of technology, the increase of energy density, and the adjustment of the subsidy policy to the mileage of the mileage, the market will pursue high energy density. This also makes the three yuan lithium battery the mainstream of the new energy passenger vehicle market.

From the direction of development in recent years, the development of three electrode materials toward high nickel is a trend. The NCM811 battery in the Ningde era refers to the battery of three kinds of lithium battery cathode materials, nickel, cobalt and manganese, which have three 8:1:1 ratios. Compared with the common NCM523 and NCM622 batteries on the market now, it improves the content of nickel and reduces the amount of cobalt and lithium. The increase of nickel ratio can increase the energy density, but also brings more intense electrochemical reaction, which affects the safety performance of the battery. However, due to the reduction of cobalt consumption, NCM811 batteries will also significantly reduce the price of batteries. For car companies, such batteries are very attractive.

"No matter whether we are worried about safety, we can not stop the energy density going forward. This is the trend of the industry, and also the market demand. " The battery industry has said in an interview with the twenty-first Century economic report.

It is worth noticing that the frequent occurrence of spontaneous combustion accidents of electric vehicles in recent years has also sounded the alarm for the industry. The industry is concerned that this is the consequence of excessive pursuit of high energy density. From the perspective of the development trend of three yuan lithium battery, the battery energy density will continue to increase, and the volume and energy increase is irreversible trend.

In the Ningde era, the market advantage of three yuan lithium battery is hard to shake. To fight against the Ningde era, BYD needs a new starting point. This entry point is the main blade of the "safe" lithium iron phosphate material.

Fight both with open and secret means

In 2020, a dispute caused by a steel needle placed the struggle between BYD and Ningde in front of the stage.

In March 29th, BYD released the "needle test" video of blade batteries smoothly at the "blade battery" press conference. "The battery needle test is like the difficulty of climbing Mount Qomolangma." At that time, He Long, vice president of BYD shares and chairman of Freddie battery, described so as to promote the high safety of blade batteries.

The results of acupuncture control tests of three kinds of power batteries released by BYD showed that three yuan lithium batteries smoked and burned rapidly after the needle was pierced, and the surface temperature was over 500 degrees. The eggs on the battery surface were blown away. Although the bulk lithium iron phosphate batteries had no open flame after acupuncture, they had smoke, the surface temperature of the battery was over 200-400 degrees C, and the eggs on the battery surface were scorched, while the BYD blade electricity The pool has no flame and no smoke. The surface temperature is only 30-60 degrees. The egg on the battery surface is unchanged.

"Blade battery will change the industry's dependence on three yuan lithium battery, return the technical line of power battery to the right way, and redefine the safety standards of new energy vehicles." BYD chairman Wang Chuanfu said.

The acupuncture test also triggered the gap between the BYD and Ningde when you came to me. In the Ningde era, it has repeatedly released its three yuan lithium battery acupuncture test short video, proving that it can also achieve acupuncture technology.

The Ningde era also said that the safety of batteries throughout the entire use of the battery is a systematic project, including battery monomer design, system integration, dynamic monitoring and system protection. Therefore, the Ningde era has focused on the overall safety of batteries. "Technically, there is a more secure solution to the battery pack level, and the actual demand for single cell needle testing is no longer there." In the Ningde era.

However, some people in the industry believe that high endurance is still an important factor for consumers to buy cars. In the short term, the mainstream market position of three yuan lithium battery is difficult to change.

"From the perspective of energy density, lithium iron phosphate batteries always have limitations. BYD Han EV can achieve 600 km level, has been very good. However, from the perspective of the development of electric vehicles, consumers prefer to buy cars with higher mileage by instinctive habit. There are car industry insiders on twenty-first Century economic report said.

Of course, the release of blade batteries also opens up a new situation for BYD, which is opening up its external channels.

"Many car companies are discussing with us about blade battery cooperation, of course, including some foreign companies." In June 3rd, Li Yunfei, deputy general manager of BYD automobile sales, said at the BYD battery factory in Chongqing, which was interviewed by the twenty-first Century economic report.

BYD's battery technology has a high degree of recognition in the industry. Previously, Mercedes Benz and BYD have established joint ventures to produce Teng potential brand cars. In the process of technology joint venture, Mercedes Benz is most interested in BYD's power battery.

In June 1st, the Ministry of industry website showed that a plug-in hybrid vehicle announced by Ford Changan will carry the power battery produced by BYD subsidiary Xi'an Zhong Di Lithium Battery Co., Ltd. This is the first time that BYD has supplied batteries for a mainstream multinational car company in China.

In addition, in 2019, TOYOTA and BYD also announced cooperation to set up a joint venture new energy vehicle company in China to produce TOYOTA cars and BYD to supply batteries. Judging from the current public information, BYD relies on power batteries to occupy absolute dominance in the new joint venture.

Host plant's game

However, BYD's battery supply is bound to be full of challenges. BYD itself is also a car manufacturing company. The production of vehicle is its biggest business. Whether the battery produced by competitors will bring risks is a problem that car companies need to measure.

In fact, in recent years, many car manufacturers have been passive in the game between automobile manufacturers and battery manufacturers. This allows the host plant to have an increasingly strong desire for power batteries.

However, battery is different from traditional machinery industry. For automobile companies, power batteries do belong to "interlacing" industries, especially battery components, which have natural trade barriers with traditional automobile manufacturing industries. At present, from the point of view of industrial division, most of the car enterprises mainly make battery pack (Pack) and battery management system (BMS) in the field of power battery, while the core is purchased from outside.

At present, there are four main modes of cooperation between car enterprises and battery enterprises: the first is to control cost effectively through the global scale purchase, just like the supply chain system of traditional automobiles. Similar to the traditional supply chain system of automobile industry, many car companies have found many suppliers to get rid of too much reliance on one supplier. The second is the cooperation between the main plant and the battery company, setting up a joint venture to ensure the stability of battery supply and product quality, and grasp some core technologies in the deep cooperation with the battery enterprises, and promote the improvement of self technology level, such as TOYOTA and Panasonic, Ningde automobile industry and SAIC, GAC, FAW and other domestic car companies. The third is self research and development, which is known as BYD. But BYD itself is transformed from a battery enterprise to a complete vehicle, and has a certain R & D base. The Great Wall automobile has also set up a honeycomb energy source for battery research and development. The fourth is the acquisition of battery companies. In 2019, Volkswagen invested 900 million euros to acquire the Northvolt 20% stake of the Swedish company, and spent 1 billion 100 million euros this year to acquire the 26% stake of Hefei state high tech group, becoming its largest shareholder.

In the Ningde era, it told the twenty-first Century economic report reporter that the relationship between power plant and mainframe plant is not a simple relationship between parts manufacturing and assembly integration. As the core component of new energy vehicle, power battery is an important part of the host plant's directional development. It needs continuous test and verification data between enterprises to enhance battery stability. The power battery enterprises can accumulate a lot of practical data and solutions in the process of serving the whole vehicle factory. The huge database will provide important support for subsequent R & D.

The host plant has natural convenience and data availability for battery research and development. But if we want to carry out mass production, the way of laboratory technology going to the commercial market is very long and needs a lot of capital investment. Therefore, the strong automobile plants or more PACK and BMS research and manufacture will be subject to the cost, or will be dominated by purchasing, supplemented by joint venture with the battery factory or research and development. Ways to achieve win-win results.

At present, battery technology is in a period of rapid iteration and change, and the competition of power battery will rise to the height of competition in the industry chain. In order to gain advantages in the field of new energy vehicles, vehicle manufacturers must continue to make in-depth layout in every aspect of the battery industry chain.

Car enterprises layout power battery, also faces many risks. "In the process of layout of battery business, for car companies, the difficulties they face are mainly the dispersion of funds and the choice of technical routes." Zhongguancun's new battery technology innovation alliance secretary general said in Puritan.

In the transition from traditional fuel to new energy vehicle, the traditional car giants are reluctant to leave the stage center. This is also an important reason why the masses are holding hands to the National High Tech Department. "If we want to push forward the Volkswagen Group's electric strategy, the investment in battery business is very important." In May 29th, Volkswagen Group CEO dises told an economic reporter in twenty-first Century that "according to the Volkswagen Group's plan, delivery of 1 million 500 thousand new energy vehicles in China by 2025 will have huge demand for battery capacity. Therefore, the public needs a number of suppliers layout, not only to meet the increasing demand, but also to help us achieve a more balanced risk management. In the future of the public's battery core supply pattern, the national high tech will become an indispensable part.

For the National High Tech Department, deep binding with the public is also an important way to regain market opportunities.

After several years of market competition, the domestic power battery industry has been preliminarily formed. "Structural overcapacity, but high quality capacity is insufficient". After a round of survival of the fittest, the two leading enterprises in the Ningde era and BYD are leading the way, but the survival environment of the two or three line battery companies is not optimistic. In 2018, once the third largest battery supplier of China, water horse thunder, was finally eliminated and confirmed the cruelty of the industry.

The power battery industry has obvious scale advantages. On the one hand, the tightening of subsidy policy, the host plant is facing a huge pressure to reduce the impact on the battery business. On the other hand, the demand of the market is constantly improving. If there is not enough capital to raise the level of R & D, once the technology is backward, it will be abandoned by the times. This is the inevitable result of the transition from the industry to the high quality development.

"War Within Three Kingdoms" in China, Japan and Korea

With the decline of subsidies for new energy vehicles, the battery market of Japan and Korea will come back, and China's power battery market will enter more intense competition. At present, China's Ningde era, BYD, South Korea's Samsung SDI, LG chemistry, SKI and Japan's Panasonic are among the first tier of the global battery industry, forming the situation of "War Within Three Kingdoms" in China, Japan and Korea.

Thanks to China's huge market base and the advantages of the local industrial chain, the Ningde era is the most profitable battery company at present, with a net profit of up to 4 billion 560 million yuan in 2019. Other leading power battery enterprises are in a state of low profit or even loss. South Korea's LG chemistry and Samsung SDI crossed the breakeven point in 2018. SKI is still in a loss period and is expected to make profits in 2022. The operating profit of Panasonic's battery business is still a total loss.

Like Tesla, which relies on China to make profits, the Chinese market will also be an important part of the battery business in Japan and Korea.

In the first quarter of this year, Panasonic and LG chemicals relied on supplying batteries to domestic Tesla and squeezing them into the first tier of China's power batteries. Although there is still a big gap between the battery loading capacity and the Ningde era, the volume between BYD and the battery is quite the same.

With the continuous expansion of China's capacity and cooperation with more Chinese car companies, Japan and South Korea's batteries may rewrite the power battery structure.

In the face of Japan's power battery enterprises in HUAFA, the Ningde era said: "our energy density, charging speed, cycle life and other indicators are more competitive than foreign competitors, and the cost also has the advantage of scale procurement and localization supply that foreign competitors do not have."

Cui Dongshu, Secretary General of the National Federation of telecommunications, told the twenty-first Century economic news reporter that for local battery companies, in the more intense competition, apart from localization advantages, local enterprises need more efforts in R & D.

At the Frankfurt motor show in September 2019, the Ningde era launched a new CTP integrated power battery development platform. Due to the elimination of battery module assembly, compared with the traditional battery pack, the volume utilization of CTP battery pack increased by 15%-20%, the number of battery pack components decreased by 40%, the production efficiency increased by 50%, and the battery pack energy density increased by 10%-15%, which would significantly reduce the power battery. The manufacturing cost.

According to Ceng Yuqun, chairman of Ningde times, we have developed batteries that can be used for 16 or 2 million kilometers in the Ningde era. "We are ready to invest in mass production at any time. In addition, there is also a technical reserve for cobalt batteries in the Ningde era. He said.

For Chinese battery companies, it is more important to go out.

At present, the overseas battery market is mainly occupied by Japan and South Korea battery enterprises, and the scale of China's battery enterprises is relatively small. In the face of the characteristics of the global layout of the automotive industry, China's battery companies are also accelerating the pace of overseas factories, and BYD and Ningde have plans to enter Europe.

In October 2019, the first overseas factory in Ningde, Germany, officially broke ground in the era of Thuringia. According to the plan, the Ningde era will form an overseas supply base with Germany as the center and the United States, France, Japan and Canada as the base, so as to promote globalization.

The rapid development of China's new energy industry has made such a giant in Ningde era, but the Chinese battery industry needs to face the competition with the international giants sooner or later. In the next ten years, the power battery industry will enter a new round of volume with the expansion of the electric vehicle market. Competition between the leading enterprises in China, Japan and Korea will lead to a real industry oligopoly. For the Chinese battery companies represented by the Ningde era and BYD, the battle has just entered the midfield stage and the test has just begun.