It is difficult for the lithium Battery industry to overcapacity and Solve weak supply chain 2022

The pace of production expansion of lithium battery industry factories did not mean to slow down at all.

Lithium battery industry, Contemporary Amperex Technology (588.000, -2.00, -0.34%)(300750. SZ) The announcement disclosed that it is planned to invest no more than 24 billion yuan in the 7th to 10 phases of the Yibin Manufacturing Base of lithium battery industry. According to incomplete statistics in China, the expansion capacity of leading domestic and foreign enterprises in the next five years has been disclosed to nearly 2.5TWh this year.

However, Fang Jianhua, partner and president of the New Energy Vehicle Venture Sub-fund of the National Science and Technological Achievement Transformation Fund, predicts that the maximum space of domestic lithium battery industry will be 1TWh in 2025. While there is a hidden worry about excess capacity, upstream lithium salt is still highly dependent on imports, and it is also doubtful whether the supply chain can support capacity expansion. In this regard, Fang Jianhua thought of 2015.

At that time, it was necessary to rely on connections downstream to get batteries, but a few years later, there were many “black swans” in the industry. In the current situation of brutal expansion of production capacity, no one knows whether the “grey rhino” will appear again.

• Lithium Battery Industry production capacity may be overcapacity, and the tail manufacturer may be more difficult

As Zeng Yuqun, chairman of Ningde Times, said, the deterministic opportunity for the new energy industry has arrived. According to the data released by the Passenger Association, the penetration rate of China’s new energy (4.230, 0.07, 1.68%)car market was 13.9% from January to November this year, compared with only 5.4% in 2020. Based on this, the Passenger Association predicts that the penetration rate of new energy passenger vehicles can exceed 20% in 2022.

As for the demand for Lithium Battery Industry, Fang Jianhua predicts that the average compound growth rate of China Power (19.700, -0.29, -1.45%)battery market over the next 20 years will not be less than 30%, and the global demand for batteries will reach 3TWh by 2030. Focusing on 2025, Guosen Securities (11.480, 0.04, 0.35%)pointed out that the global demand for lithium batteries by 2025 was 1.19TWh.

However, according to incomplete statistics of battery China, the expansion capacity of leading domestic and foreign enterprises this year in the next five years has been close to 2.5TWh. Even conservative estimates, the expansion of Lithium Battery Industry production capacity is quite amazing.

Wuxi Lead Intelligent (74.370, 0.17, 0.23%)(300450. SZ) Chairman Wang Yanqing recently quoted industry agency statistics as saying that in 2021, the world has announced that the power and energy storage battery production expansion projects exceeded 2TWh, of which the total domestic investment exceeded 500 billion yuan, and the expansion of production exceeded 1.4TWh.

According to the statistics of leading domestic enterprises, Ningde Times is expected to exceed 670GWh by 2025, BYD (268.120, 0.99,0.37%) planned production capacity will exceed 600GW, and China Innovation Airline planned production capacity will be 500GWh.

In addition, there are also “chasing soldiers” such as Guoxuan Hi-Tech (51.250, -0.22, -0.43%)Yiwei Lithium Energy (118.180, -0.15, -0.13%)Honeycomb Energy, Funeng Technology (33.650, -0.25, -0.74%) and so on.

The pace of expansion of battery factories may be too big. According to Fang Jianhua’s prediction, China’s sales volume of new energy vehicles will be about 3.4 million this year, 5.1 million next year, and 9 million by 2025. If you can infer from the number of 9 million new energy vehicles, the total demand for power batteries in 2025 is only about 600GWh. If the energy storage of 200GWh is superimposed and the competition in the foreign market of 200GWh, it will be 1T at most.”

On the other hand, China Automotive Power Battery Industry Innovation Alliance disclosed the top ten list of power battery enterprises in January-November 2021, showing that only Ningde Times, BYD, China Innovation Airlines and Guoxuan Hi-Tech accounted for more than 5% of the market, with a market share of 51.4%, 16.6% and 5. 8% and 5.1%. This means that the Ningde era accounts for half of the Lithium Battery Industry market, but the vast majority of Lithium Battery Industry plants account for less than 5%.

Fang Jianhua further analyzed and pointed out that under the condition that the proportion of the power battery market remains unchanged, the market share of 5% of 10 million electric vehicles is only 500,000, that is, about 30GWh installed, and most lithium battery industry can only be obtained by competing crazily with Ningde Times, BYD, and foreign enterprises. .

If placed in the 1T global Lithium Battery Industry demand market, the market share of 5% is only 50GWh, which is not as good as the zero expansion capacity of domestic head lithium battery industry plants. In terms of global competition, regardless of competing with established battery companies such as LG New Energy and Panasonic, Quantum Scap e. Ganfeng lithium battery industry, Weilan New Energy, Huineng Technology and other solid-state lithium battery industry plants enter the market to disrupt the situation. This is obviously not an optimistic signal for a large number of tail battery factories.

The release of middle and upper reaches lags behind, and the supply chain will encounter a “big test”

In 2021, the demand for lithium battery industry was strong, and the price of lithium battery industry in the middle reaches of lithium battery industry materials has also risen to varying degrees due to the tight balance between supply and demand. In fact, the production capacity such as electrolyte, positive and negative electrode materials, lithium-copper foil, etc. generally takes 1-2 years to release, while lithium salt links are still highly dependent on foreign imports, and the release of new production capacity is relatively lagging behind.

Qu Yinfei (40.650, -0.56, -1.36%) a lithium analyst at the new energy division of Shanghai Steel Federation (40.650, -0.56, -1.36%), said that the global increment is expected to be 163,000 tons (LCE) in 2022, with a supply growth rate of about 24%, but the growth rate of demand is nearly 40%. In 2022, in the face of lower opening inventory, supply remained insufficient to meet the high-growing demand.

There is no diaphragm with price changes this year, or the overall price will rise in 2022. Cailian News Agency’s previous report “Industry News | Diaphragm Price Increase Now Supply and Demand Tensions Next Year Expected to Intensify, Head May Benefit from Capacity Release”, shows that the prices of some wet diaphragm products have risen.

According to Xinyan information statistics, the global output of lithium diaphragms in 2021 was 10.55 billion square meters, of which China’s diaphragm output was 7.31 billion square meters. Global demand for lithium diaphragms exceeded 13.5 billion square meters in 2022, an estimated increase of more than 50% year-on-year. It is expected that the demand for diaphragm will increase by more than 3 billion square meters next year.

However, next year, the global production capacity of the new diaphragm master coil will not exceed 5 billion square meters. Considering the climbing capacity and yield yield, the actual effective new output will be less than 2 billion square meters, and there is a clear gap.

As the leader of lithium battery industry enterprises, the strong industrial chain status of Ningde Times makes it reluctant to get materials through advance payment.

However, it is worth noting that on December 24, Ningde Times passed Xiang Enjie shares (250.400, – 4.49, -1.76%)(002812. SZ) Shanghai Enjie, a holding subsidiary, paid 850 million yuan in advance to ensure that Shanghai Enjie supplied about 5.178 billion yuan of wet diaphragms for power batteries to Ningde Times and its subsidiaries in 2022, which reflects the pressure of diaphragm supply to a certain extent.

In fact, in addition to the diaphragm link, electrolyte has also become a “heart headache” in the Ningde era. Some industry insiders revealed to Cailian News Agency that the domestic electrolyte leader Tianci materials (114.650, -1.70, -1.46%)(002709. SZ) and New Zeus (113.000, -1.21, -1.06%)(300037. SZ), in addition to the agreed supply, the new demand for the Ningde era is mutually “pulled”.

Some people familiar with the matter said that for God-given materials, the proportion of customers in the Ningde era ranged by about 40% to 50%, and generally there will be no major changes. With the increase of the production capacity of God-given materials, the supply of Ningde era will also increase proportionally.

But if the proportion increases significantly, it is difficult in business logic. New Zhoubang, because of the different sales strategies, there are relatively more loose orders.

In addition to business logic, the most intuitive thing in front of suppliers is that whether it is a long agreement order or a loose order, the price given by Ningde Times is lower than that given by its peers. Under the situation that the supply of electrolyte exceeds the demand, electrolyte enterprises are obviously unwilling to make a meagre profit while providing more production capacity.

Therefore, guaranteeing supply, locking price, prepayment and other methods have become the conventional means for lithium battery industry enterprises to ensure the safety of the supply chain. However, under the circumstances that the expansion of lithium battery industry production can be called “fanaticism” and the upstream lithium salt resources are relatively “lagging behind”, Ningde Times has been strengthening “guarantee supply”.

Other lithium battery industry enterprises may also need to “extach magic power” to ensure the safety of the supply chain. For example, lithium salt and diaphragms, which are already tight in supply and demand, will not increase the demand in 2022, which means that there must be a capacity utilization rate of lithium battery industry enterprises that cannot be satisfactory.

Multi-factor protection is needed to expand production. Beware of “grey rhinoceros”

“If there is no sustainable financial guarantee, this blind expansion will eventually become a ‘grey rhino’.” Fang Jianhua told Cailian News Agency reporters. However, financial guarantee is only one of them. Whether the real needs, the stability of technical processes can support rapid capacity expansion, management level and supply chain guarantee in the process of enterprise production expansion are also key factors.

Fang Jianhua gave an example to illustrate that climbing many lithium battery industry plants is an extremely painful process, because the monthly cost of 5GWh is as high as tens of millions. If the process is not mature enough and the yield is low, it will cause a huge waste of human, material and financial resources.

Sunwoda Electronic (42.160, 0.82, 1.98%)(300207), told Cailian News Agency that whether the enterprise has excess production capacity depends on whether the enterprise’s production capacity is high-quality in the future and whether it can enter the ranks of the most mainstream suppliers.” Money alone is not enough to make power batteries. It also requires strategy, supply chain, talents, and even the resilience to stick to it.

“I think the power battery industry will enter the oligopolistic competition mode in the future. Power batteries are technology-intensive, capital-intensive and economies of scale. After these conditions are screened, especially the big waves wash the sand. The winner must have continuous innovation ability, strong financial strength and vehicle-level quality assurance ability, so the barriers to this industry will become higher and higher. Liang Rui further analyzed and said.

Secretary-General of China Chemical (12,000, 0.03, 0.25%) and the Physical Power Industry Association, said, “How can the quasi-first-tier and second-tier enterprises get more orders and market share in the future also requires enterprises to pay continuous attention and efforts. It is necessary to avoid the elimination of many enterprises, as well as a large amount of waste and risk of resources, as the previous round of shuffling.

However, some people related to lithium battery industry enterprises told Cailian News Agency that under the case of the large-scale expansion of production by peers, if they cannot follow up, it means losing the voice of the industrial chain, and the decline in downstream market share is almost predictable. On the other hand, in the case of large-scale verification of installed capacity, it remains to be answered whether hundreds of GWh production capacity can find matching orders.