Shulou(Shulou.com)11/24 Report--

Recently, the news of "buying a mine" by Xilai car has triggered a heated discussion in the industry.

Before the National Day holiday, Blue Northstar Limited, a wholly owned subsidiary of Xilai Automobile, reached a strategic financing deal with Australian mineral exploration and development company Greenwing Resources to jointly advance its exploration plan for the lithium project in the salt lake of San Jorge San Jorge in Catamaca, Argentina.

Prior to this, in May this year, Weilai said it planned to invest 219 million yuan to build 31 R & D laboratories engaged in the research and development of lithium-ion batteries and battery packs, as well as a lithium-ion battery battery trial production line and a battery pack pack line.

Similarly, GAC also set its sights on self-developed batteries. Compared with the 200 million "small money" from Yuelai, GAC spent a lot of money to set up a Greenrock battery company with a total investment of 10.9 billion yuan. At the same time, the participating company Guangzhou Juwan Technology and Research Co., Ltd. will build a battery production base to mass produce cells, modules and PACK systems for extremely fast rechargeable power batteries, with a total investment of 3.69 billion yuan.

Coupled with Tiangong battery, Rubik's cube battery, magazine battery, Dayu battery, more and more car companies have extended their hands to the battery.

In this regard, people in the industry are not without worry, from the motivation, feasibility, income and other aspects of analysis, car companies to develop their own batteries or can only be a dream.

There is no doubt that the battery is the most important component of new energy vehicles, accounting for about 40% of the cost of a car, and the performance of the battery, such as mileage and battery brand, has become an important decision factor for consumers to buy a car. Self-research, self-production, self-supply, reduce battery costs, and even make a profit by going public independently is the "wishful thinking" of many car companies.

In fact, many well-known enterprises have already hit the wall and turned back with such a "wishful thinking". Nissan, the veteran of electric cars, sold its power battery company AESC to Vision Group in 2018, citing its desire to buy low-cost, high-performance lithium batteries from third parties. By the way, AESC has no way to reduce costs.

Is it because Nissan doesn't sell well? Actually this is not so. In 2015, Nissan sold more than 200000 leaves worldwide, but Tesla Model S sold less than 100000 at the time. Let's take a look at domestic car sales. It was not until the second half of 2020 that the market for new energy private cars was really opened. By January 2022, a total of 177000 cars had been delivered by Xilai and 120000 by GAC in 2021.

If you look at China, the same is true. Geely is actually a pioneer in the development of self-made batteries. In 2018, Geely Technology established Hengyuan New Energy, which was later renamed Gochi New Energy to explore power batteries. But it is a pity that this company can only take small orders from Geely. In May 2021, Hengyuan New Energy also issued a notice on its production of about 300000 30Ah ternary lithium-ion batteries for public sale bidding, that is, a big sale. The models carried by these batteries do not sell well, and the battery technology is too fast to sell, and the longer the inventory is pressed, the more depreciated it is, so Hengyuan is also eager to dispose of the inventory.

Let's take a look at Bosch, another leading player in the automotive field, who announced at the beginning of 2018 that he had given up homemade batteries to focus on BMS. Bosch thought it was more cost-effective to use external batteries, and gave four reasons. Now, these four reasons accurately explain that it is not feasible for car companies to develop their own batteries.

First of all, at the market level, the global power battery market has entered a relatively stable development pattern. Ningde era stands out, with a market share of more than 35%. In August, it has reached nearly 40% of the market share of LG, BYD and Panasonic to form the second echelon, and the market share can be maintained at more than 10%. Other battery manufacturers are the third echelon, with a global market share of less than 5%. Bosch believes that if the battery unit is put into production at this time, it will not only take no advantage, but also take a great risk of market competition.

Second, the technical level, the current power battery technology iteration is still very fast, Ningde era since the launch of CTP in 2019, has iterated several versions, the advent of Kirin battery has brought battery performance to a new level.

It can be predicted that, with the increased investment of battery enterprises, the battery will blossom more in the technical route, and continue to improve its performance, competing in the future is the speed of technology research and development, and the hard strength of research and development, such as talent, R & D investment and so on. Bosch believes that new technologies for power batteries emerge in endlessly and that upgrading is imminent. The implication is that Bosch is too late to intervene in battery technology.

The third is cost, which can be seen from the current gross profit margin of battery manufacturers. For enterprises with an integrated industrial chain in the Ningde era, the gross profit margin was only 18% in the first half of the year. China New Airlines, which has just listed in Hong Kong, had a gross profit margin of 4.8%, 13.63% and 5.5% respectively from 2019 to 2021. And more battery factories are not making money or even losing money.

In the view of industry analysts, want to rely on the size of several GWh to reduce costs? "it is tantamount to a bit of a pipe dream." Bosch frankly said that the profit space is very limited, once the price war starts, it can be said that it can not make a few money.

The last is investment. As far as the nature of business is concerned, the focus is on the rate of return on investment. When the rate of return is not high, battery is undoubtedly an important asset investment. Industry analysts said, "despite the fact that the average investment of a GWh is only 500 million yuan in China, supporting technology research and development, process research and development, equipment research and development, test and verification laboratories, maintenance services, recycling services, and so on, none of them is less than a cable investment. You know, now master's graduates in the fields of electrochemistry and materials all have an annual salary of 300000 yuan."

Bosch also said that according to 1T calculation, if the market share is to reach 20%, then at least 20 billion euros (about 140 billion yuan) will be spent on the production, testing, recycling and other equipment of battery units. This sum of money is not a small sum for any spare parts company. What's more, once there is a revolutionary innovation in technology, then the upfront investment is very likely to be wasted.

02. "New entrants want to catch up? unless it's a miracle, GAC, which spends 10 billion yuan, boasts that in the future, 30% of GAC's high-end batteries will be developed and produced by itself, while 70% of the medium and low-end batteries will be manufactured by external battery companies. Can this wish and goal be realized? Let's take a look at the data again.

In reality, even after years of deep cultivation in the industry, many battery companies still do not meet the standards of global first-class battery manufacturers. Benchmark, the world's first research institution specializing in the lithium-ion battery supply chain, evaluates and scores the lithium-ion battery super factory every year, covering nearly 100 battery manufacturers around the world, and eventually divided into Tier 1 (global power battery manufacturer), Tier 2 (global power battery second-tier manufacturer) and Tier 3 (global power battery third-tier manufacturer).

Prior to this, only Ningde era and Vision AESC was selected as the first-class manufacturer of power batteries in the world. It wasn't until the last two years that BYD and Xinwanda joined Tier 1. Also located in the first-tier manufacturers are LG, Samsung SDI, SKI and Panasonic, any of which has a R & D base of more than a decade or even decades.

In the view of industry analysts, "new entrants want to catch up? unless it's a miracle." The reality is that the vast majority of domestic battery enterprises are still in the second and third levels, enough to see that high-end production capacity is still very scarce.

From the current point of view, it is extremely unlikely to invest hundreds of millions or even tens of billions of dollars to build high-end batteries, and there is only one possibility for car companies to build batteries, that is, to build low-end batteries, not to pursue performance, not to pursue extreme consistency, and to return to the old path of the engine. First build a 6-minute battery to reduce costs.

But the problem is that 6 distribution motives were profitable when foreign engines were very expensive at that time. If car companies did not sell more than 1 million vehicles a year, it would be impossible to save money to build 6-point batteries, or it would be cheaper to buy from small factories. I didn't benefit at all, and I had to bear a heavy burden of assets, the vehicles didn't sell well, and I had to consider the inventory of batteries, which was in vain.

Although Evergrande's "buying" strategy has become an after-dinner conversation in the industry, its ability to achieve mass production in a very short period of time still confirms the operation logic behind the industrial chain and the importance of labor division and cooperation in modern industry. The proficiency and skills of labourers are constantly improved due to the specialization of the division of labor, and the time loss of the conversion between jobs is constantly reduced as a result of the division of labor. Therefore, the development of division of labor drives the rapid improvement of social productivity and business competitiveness.

Industry analysts believe that for the whole new energy vehicle industry, the strong industrial chain needs players and enterprises with different roles in the industrial chain to give full play to the effect of division of labor and become strong on the chain. If battery builders build cars, car builders build batteries, and fall into an endless cycle of ineffective investment, it will bring a great waste of manpower, capital and resources. Overseas enterprises will be much smarter. Domestic enterprises should no longer do things that work in vain.

"the so-called car company building batteries can reduce costs, that is, to deceive laymen's seemingly dazzling soap bubbles."

This article is from the official account of Wechat: Tech (ID:tech618), by Jia Ningyu

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