Review and prospect of 2018 new energy power battery market

In December 2018, China produced 226,000 new energy vehicles, up 16.0% year-on-year and 17.7% month-on-month. In 2018, 1.221 million new energy vehicles were produced, representing a significant increase of 50.7% year-on-year. Among them, the output of new energy passenger vehicles was 994,000, up 80.7% year-on-year. In December 2018, the installed capacity of power batteries was 13.60 GWh, up 15.4% from a year earlier, according to the GAI. In 2018, the installed capacity of power batteries was 57.35 GWh, up 57.0% year-on-year, of which the installed capacity of new energy passenger vehicles reached 32.86 GWh, accounting for 57.3% of the total installed capacity, up 137.0% year-on-year, and became the main demand growth point of power batteries. Market segment analysis In December 2018, the total installed capacity of power batteries reached a record high of 13.60 GWh, a year-on-year increase of 15.4% and a month-on-month increase of 51.7%. The 5.10 GWh power battery installed capacity of new energy buses this month, a 108.1 per cent month-on-month increase, was the most significant driver of month-on-month growth, mainly due to industry expectations of a sharp decline in subsidies for new energy buses in 2019 and the resulting boom in both production and sales. This month, the output of new energy buses reached 33,599, up 100.1% from the previous month. Among them, Yutong Bus, Dongfeng Xiaokang, Dongguan Zhongqi Hongyuan Automobile, Zhongtong Bus, BYD and other TOP10 bus producers all had 4% month-on-month decline except Nanjing Jinlong A month-on-month growth rate of more than 9 per cent. The installed capacity of special purpose vehicles and trucks reached 2.48 GWh this month, up 95.2% from the previous month. Similar to the situation of passenger cars, it was also the main driving force for the month-on-month increase in the installed capacity of power batteries in December. However, compared with the same period last year, the number of passenger cars and special purpose vehicles dropped by 10.8% and 27.9% respectively, and the installed capacity of power batteries of passenger cars reached 6.02 GWh in December, up by 129.3% compared with the same period last year. Only the passenger car market grew positively compared with the same period last year. In 2018, the installed capacity of power batteries was 57.35 GWh, up 57.0% year-on-year, of which the installed capacity of new energy passenger vehicles reached 32.86 GWh, accounting for 57.3% of the total installed capacity, up 137.0% year-on-year, and became the main demand growth point of power batteries. New Energy Passenger Cars produced 994,000 vehicles in 2018, up 80.7% year-on-year. The increase in installed capacity of power batteries far outpaced the increase in output, mainly due to the upgrading of new energy passenger vehicles in 2018. In 2018, 440,000 Class A vehicles will be produced and the installed battery capacity will reach 15.85 GWh. Both the output and the installed power battery capacity of Class A vehicles will far exceed that of Class A00 vehicles (327,800 vehicles will be produced and the installed battery capacity will be 8.63 GWh). Class A vehicles have firmly occupied the largest share of the new energy passenger vehicle market, and we believe that the share of Class A vehicles will continue to expand in 2019. The installed capacity of plug-in hybrid passenger vehicles in 2018 was 3.71 GWh, representing an increase of 145.7% year-on-year, mainly due to the increased recognition of private consumption In 2018, BYD Tang, Roewe i6, BYD Qin, Roewe eRx5, including joint-venture brands such as Touguan L PHEV and BMW 5 Series, all achieved good results in the market. Battery structure analysis LiFePO_4 occupies the largest market share at the beginning by virtue of safety, cycle life, price and other advantages. However, with the subsidy policy and high energy density linked, ternary battery energy density advantage has become the mainstream choice of passenger cars. With the rapid growth of passenger car production and market share, ternary batteries quickly surpassed lithium iron phosphate batteries, firmly occupying the mainstream position. Power Battery Installation TOP10 Enterprise Analysis Installation TOP10 Enterprise cumulative installed capacity in 2018 reached 43.36 GWh, accounting for 81% of the total installed capacity, compared with TOP10 enterprise in 2017, the market concentration to the head of the enterprise increased significantly. The installed capacity of Ningde Times will reach 23.54 GWh in 2018. Now, it has established cooperative relationship with FAW, BAIC, Geely, SAIC, GM Wuling, Chang'an Automobile, Weilai, Guangzhou Automobile, Chery, Great Wall, Dongfeng and Jianghuai Automobile, and other domestic mainstream complete vehicle enterprises. The supporting advantages of the main automobile enterprises are obvious. The gap between them and BYD, which ranks second, is gradually widening, and the installed capacity is more than twice that of BYD. Although BYD has already started to supply batteries to foreign countries and signed a strategic cooperation agreement with Chang'an to establish a joint venture company, the current effect is very low, and the matching batteries are mainly its own brands. However, with the excellent market performance of the BYD brand in 2018, BYD will still firmly occupy the second place. Ningde Times Generation and BYD installed capacity in 2018 totals 34.6 GWh, accounting for 60.4% of the total installed capacity. The installed capacity of TOP10 enterprises, in addition to Guoxuan high-tech, billion latitude lithium energy, Beijing Guoneng these three enterprises mainly to lithium iron phosphate batteries, other enterprises are based on ternary material battery supply. From the perspective of product structure, some soft-packed batteries will be supplied in Ningde era in 2018, but the installed capacity is almost 100% square batteries; BYD all products are square batteries, Guoxuan high-tech, billion latitude lithium products in the square battery also accounted for more than 75%; Other TOP10 enterprises, Fu Neng Technology, Beijing Guoneng, Wanxiang soft-pack batteries accounted for almost 100%; Lishen's cylindrical batteries account for 76 per cent of the total and has started supplying brands such as Jianghuai with 21,700 cylindrical batteries, while Bick's batteries account for 100 per cent of the 18,650 cylindrical batteries. In 2018, the installed capacity of square batteries accounted for 74.03%, occupying an absolute mainstream position. With the advantages of high specific energy, high safety and high matching flexibility, soft-packed batteries have been favored by more and more mainframe manufacturers, and the installed capacity of soft-packed batteries has increased by 65.52% in 2018 compared with the same period of last year. The 2018 Summary and 2019 Outlook New Energy Passenger Cars will continue to grow at a fast pace. The Institute forecasts that new energy passenger vehicles will produce approximately 1.5 million vehicles in 2019, of which PHEV will continue to increase to 30% (25% in 2018). Passenger cars with new energy sources are still the main growth point of the market for new energy vehicles, and also the main demand for power batteries Longer. Energy Density and Cost Outlook for Power Battery Systems According to the 13 batches of recommended catalogues issued by the Ministry of Industry and Information Technology in 2018, due to the new subsidy policy, the subsidy threshold for energy density will be raised from 90 Wh/kg to 105 Wh/kg in 2017, reaching 120 Wh/kg-140 Wh/kg, which can only get twice the subsidy, 140 Wh/kg-160 Wh/kg can get 1.1 times the subsidy, and over 160 Wh/kg can get 1.2 times the subsidy, which promotes the rapid growth of battery energy density. In 2018, 64% of all electric passenger vehicles will have a battery energy density of more than 140Wh/kg. The energy density of ternary batteries is expected to approach 200 Wh/kg in 2020 and 250 Wh/kg in 2025. The energy density of LiFePO_4 system is close to the limit, but it has a price advantage over ternary materials. Challenges in the post-subsidy era Continuation of the step-by-step subsidy approach in 2019, with significant reductions in amounts, increased emphasis on safety and slower battery high-energy-density incentives. Main indicators of change: 1. The upper limit of degree subsidy is reduced from RMB 1,200 yuan/KWh to RMB 1,000 yuan/KWh; 2. Raise the endurance mileage of pure electric passenger vehicles: ① Raise the threshold to 250km; ② Subsidy was obtained for ≥ 250 km, but the overall decline was close to 50%; 3. That energy density of the pure electric passenge vehicle is required to be raise: ① the threshold is raised to 120 Wh/kg; ② ≥ 120 Wh/kg was subsidized, and the reward of high energy density coefficient was cancelled; 4. 100 kilometres Electricity consumption is better than the threshold value: ① 10%-20% is subsidized by 0.8 times; 12) double that subsidy when the subsidy is better than 20-35%; ③ 1.1 times of subsidy when it is better than 35%; 5. Energy consumption optimization of PHEV products should be increased by 5%; 6. Elimination of local government subsidies. Other requirements: 1. Setting a transitional period of 3 months to meet the 18-year requirement but not the 19-year requirement, with a 10% subsidy according to the 18-year subsidy standard; Meet the 19-year technical requirements and 60 per cent of the 18-year subsidy. 2. Implementation of the 2018 subsidy programme pending the release of the new policy. 3. Cancellation of eligibility for subsidies in the event of a major security incident. Under this version of the subsidy standard, 19 years will see a sharp decline in the amount of bike subsidies, with a maximum decline of 100 per cent and an average decline of more than 70 per cent. Note: Assuming that the energy density, battery capacity and power consumption of each product will remain unchanged in 2018, according to the theoretical price of the new subsidy policy, the price of the A00 model will reach the price range of around 100,000 yuan, the price of the A0 model will reach the price range of around 150,000 yuan, and the price of the A-class model will be around 200,000 yuan, which is higher than the current terminal price by a different margin. Note: Assuming that the energy density, battery capacity and power consumption of each product enter the post-subsidy era according to the post-subsidy era coping strategy with the same configuration in 2018, the enterprise needs to strengthen its cost management and control capacity and be prepared to pay for the subsidy retrogression due to the fact that the cost reduction of the three power companies and the value of the double-point transaction are difficult to make up for the total withdrawal. Problems faced by enterprises: 1. Complete withdrawal of explicit government subsidies in 2021; 2. Projected 2020 The cost of power batteries is about 25% lower than that in 2018, but it is difficult to compensate for the decline. 3. Most of that automobile enterprise can produce electric vehicles or meet the requirement of integral, Although the situation of double-point supply exceeding demand has been improved, we do not expect the transaction value to be high in the short term. In the short term (2019-2020), we suggest that: 1. Enterprises can improve the endurance by product upgrading and adopt high energy density batteries to alleviate the impact of subsidy retreat; 2. 2. Some models can keep the terminal price stable through the profit concession of the terminal customers; 3. The upstream and downstream industry chains reduce the cost together. In the medium and long term (2021-2025), we suggest that: 1. Enterprises can plan their products reasonably and reduce the battery consumption according to the battery cost and market demand, and some models can use lithium iron phosphate instead of lithium iron phosphate to reduce the cost; 2. Developing new modes of sharing business and renting and selling financial services to realize the coordinated development of industries; 3. Obtain funds through points trading and be prepared to pay for the subsidy yourself. With the gradual withdrawal of subsidies and the opening of policies, foreign power battery manufacturers have made a comeback through upstream raw material joint ventures and localization of factories. The main strategies of foreign power battery enterprises in China are as follows: short-term joint venture and cooperation + long-term localization of factories. 1. Joint venture to produce upstream products: layout of the upstream industrial chain, avoidance of market and policy risks a) LG Chemicals cooperates with Huayou Cobalt Industry. Both sides invest RMB 4 billion to establish two joint ventures. Both sides Each holding a joint venture b) SKI will invest 86.4 billion won to restart plans announced in 2016 to build new joint ventures in China, Focus on the production of battery materials 2. Investment in new plants: In preparation for a full subsidy downgrade, long-term development a) Samsung SDI plans to move its plants in Xi'an, Tian'an and Ulsan, South Korea, to Wuxi by 2023 b) Panasonic plans to spend "hundreds of millions of dollars" deploying two new production lines at its Chinese battery plant, which will increase Panasonic's battery capacity in China by up to 80 per cent; Changing Wuxi Digital Cylindrical Battery Base into Low Speed Electric Vehicle Battery Production c) LG Chemicals announced in July 2018 that it would invest approximately 13.8 billion yuan to build a 32 GWh Nanjing plant; January 2019, With the further recession of subsidies and the entry of foreign-funded enterprises, Competition in the power battery industry will become increasingly fierce, but with the rapid development of China 's new energy market in recent years, China' s local battery companies have also made great progress, the head of the local power battery companies have already had the strength to compete with the Japanese and Korean giants. The IPO completed by Ningde Times in 2018 not only established joint ventures with local mainstream auto companies such as SAIC, Dongfeng, Guangzhou Auto and Geely, but also provided batteries to international famous auto companies such as BMW and Daimler. In 2018, the installed capacity of Ningde Times reached 23.5 GWh, ranking first in the world. BYD ranked second, in addition to its own supporting BYD In addition to its strong brand presence, BYD also formed a power battery joint venture with Chang'an Automotive in 2018 and plans to list its battery business independently by 2020. Other enterprises, such as Yiwei Lithium Energy, have signed supply contracts with Daimler for many years and been gradually fermented by Daimler Demonstration Effect. In 2018, Yiwei Lithium Energy has successively accepted the audits and inspections of many international high-end passenger car customers. Other high-quality local enterprises such as Guoxuan High-Tech, Lishen Battery, Bike Battery and Wanxiang 123 are also developing rapidly. We believe that the entry of foreign enterprises will intensify competition in China's power battery market and accelerate the elimination of small and medium-sized enterprises.