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China Power Battery Development Report

China Power Battery Development Report

Power battery is the "heart" of new energy electric vehicles, accounting for 30% -40% of the total vehicle cost, and directly affects the endurance and safety of electric vehicles. Driven by the new energy vehicle industry, power batteries have experienced explosive growth in the past ten years. From 2009 to 2018, domestic installed capacity increased from 0.03GWh to 57GWh, an increase of more than a thousand times. What are the current development trends of China's power battery industry policies, technologies and markets? Facing challenges such as mileage anxiety and battery safety, can the industry break through many consumer pain points? What are the future prospects?

Benefiting from the expansion of production and sales scale of new energy vehicles and the increasing charged volume, the power battery market has maintained rapid growth, and there is still much space for development in the future. From January to May 2019, the installed capacity of power batteries in the domestic market was 23.4GWh, year-on-year increase of 83.9%. According to the calculation of 5.9 million new energy vehicle production in 2025, the demand for power batteries will reach 330.6GWh, which is about 6 times of installed capacity in 2018.

The industry is fiercely competitive, and local battery giants have risen. Downstream new energy vehicles have entered the growth period from the introduction period, subsided subsidence, and increased technical performance requirements intensified the survival of the fittest in the battery industry, which increased market concentration. In 2018, China's total power battery production capacity reached 260GWh and sales were less than 60GWh. The structural overcapacity was serious. The number of power battery companies in the past five years has decreased by 2/3. All the top ten manufacturers in the domestic market during the first half of 2019 were local manufacturers, occupying with a market share of 87.9%, CATL ranked first in the global market with 25.4% market share over Japan's Matsushita.

From the policy side, in the past, the state has introduced nearly 30 major policies for the power battery industry, mainly focusing on competition management and technical guidance.

1) Competition management: From enlargement support to strengthening encouragement, opening up further for the outside world and introduce international competition. In 2019, the Ministry of Industry and Information Technology will cancel the white list of power batteries. In the future, powerful foreign companies such as LG Chemical and Samsung SDI will re-enter the Chinese market.

2) Technical guidance: At present, from the perspective of industrial development, performance indicators such as battery cell energy density, cycle life, charging rate, and service life have reached or even exceeded the 2020 policy goals, but the pack energy density is still far from the policy goals. In terms of battery cost, the current average price of three polymer batteries is about 1.05 RMB / Wh, which is still slightly higher than the policy target of 1 RMB / Wh. In the "New Energy Vehicle Industry Development Plan (2021-2035)" (Consultation Draft) disclosed a few days ago, the policy no longer provides specific design guidance for the performance indicators of power batteries, but emphasizes that companies’ dominant position of choosing technology routes, production capacity layout and other aspects, in the future car companies will mainly choose technical routes according to the actual needs of consumers.

From the perspective of the industrial chain, higher energy density, safer, faster charging, and lower costs are always the core goals of industrial development. The upstream of the power battery has four major raw materials: positive electrode, negative electrode, electrolyte, and separator. There are three major packaging technologies in the midstream: cylinde, square, and soft packs. The downstream pack companies have three major forces: automobile manufacturers, battery plants, and third-party packs.

1) Upstream raw materials: high-nickel positive electrode, silicon carbon negative electrode, ceramic separator are the future trends of the industry, and the core technology of electrolyte is additive. Among them, the safety and maturity of ternary high-nickel cathodes need to be improved, and NCA technology is still different from foreign countries.

2) Midstream packaging: The proportion of square, soft pack, and cylinder varies greatly among different models. The square battery is the current mainstream, and the soft pack battery has obvious energy density and safety advantages. It is expected that the proportion will increase in the future.

3) Downstream Pack: Car companies cut into the Pack field and became the biggest force in the Pack market. Third-party Pack manufacturers were marginalized. At present, pack companies are actively deploying technologies such as non-modularization, fast charging, and low temperature modification to improve energy density and charging performance.

The China Automobile Dealers Association's survey of new energy vehicle consumers shows that vehicle endurance, battery safety, and battery recycling are the three main factors that consumers give up buying new energy vehicles, accounting for 87% of the total, all related to batteries. Whether the pain points faced by the power battery industry can be resolved is directly determines the steady and healthy development of the new energy automobile industry.

1) Mileage anxiety: Under the constraints of vehicle space and quality, improving battery energy density is the best way to increase the life of electric vehicles. High-capacity battery technology is the key. The ternary high-nickel system can meet the target of 300Wh / kg for power battery cells in 2020 but cannot meet the requirements of 2025 and 2030. All-solid-state, ternary lithium-rich batteries deserve attention.

2) Battery safety issues: New energy vehicle safety issues have both technical and regulatory factors and are mostly caused by some companies seeking quick success and weak safety awareness. In fact, most new energy vehicle safety accidents could have been avoided in advance. According to the “Report on the results of big data security supervision of the new energy vehicle national regulatory platform”, among 79 new energy vehicle safety accidents discovered in May-August 2019, there were 47 accidental vehicles connected to the regulatory platform, and another 28 accidents warned by the regulatory platform within 10 days before occurred . Platform warning reminder. In the future, pre-caution mechanisms can be established by using big data platforms, etc., and product quality supervision can be strengthened through catalog management.

3) Battery recycling issues: The model standards for power batteries should be unified and a more comprehensive recycling system should be established. According to statistics, in China, 13,500 tons of used power batteries were recovered, and the actual recycling ratio was only 22.9%. Poor policy binding power, chaotic recycling system, few steps of echelon market space, and low profit margin are the main reasons for the low recycling rate of power batteries.