Competitive situation and future prospect of power battery industry
From the perspective of business models, with policy support and manufacturing barriers, the power battery industry is a sector that is difficult to be affected by macroeconomic fluctuations in the short term, and is full of imagination and certainty in the long run.
“one superpower & multiple powerhouses”
The power battery presents a development layout of “one superpower and multiple powerhouses”, and the status of the industry’s leading companies is difficult to be shaken in the short term, but the potential of the new energy battery industry determines that other manufacturers still have sufficient room for development
CATL power batteries
Capital preference
In the sector of power batteries, different capital parties have different investment methods, but all of them focus on the technology accumulation, cost and continuous iteration ability of manufacturers.
Since the second half of 2021, the sharp increase in the prices of power battery raw materials such as lithium, cobalt, and nickel has added a lot of cost pressure to downstream power batteries and OEMs.
In March 2022, the shortage of the supply chain caused by the epidemic will make the new energy vehicle market, which was originally in an outbreak situation, suffering a short-term setback, adding to the urgency of laying out the power battery supply chain.
As the power core of new energy vehicles, the performance of the power battery not only determines the rigid indicators such as vehicle safety factor and cruising range, but also directly affects the profitability of car companies, accounting for nearly 40% of the cost of the vehicle.
Car companies’ role
Car companies have always been the leaders in the automotive industry chain, and naturally want to gain a firm foothold in the new energy era.
Although power batteries are the core components of new energy vehicles, they are not the specialty of most current car companies.
In the four years from May 2017 to May 2020, the number of investment and financing in the power battery field continued to decline. Until the second half of 2021, the number of financing related to power batteries jumped up. From May 2021 to May 2022, the number of financings will increase by 124.5% year-on-year.
Among the power battery manufacturers that have received financing in the past two years and the financing amount has been disclosed, more than 15 manufacturers have raised more than one billion yuan in a single transaction.
The promising industry and the huge influx of capital have created a number of power battery manufacturing giants, and at the same time have allowed second-tier manufacturers to rise and grow rapidly.
Behind the scenes, the capital giants that provide funds for the development of power batteries, provide far-reaching industrial layouts and make suggestions are also an important force in promoting the development and reform of power batteries.
The investment field of high-certainty line – new energy power battery
When it comes to power battery investment, investors usually have a highly similar description – this is a definite opportunity. The power battery industry is difficult to be affected by macroeconomic fluctuations, and the number of new energy vehicles is far from the ceiling, making the market development of power batteries full of imagination.
For the industry, whether it is the “carbon peak” and “carbon neutrality” goals in the plan, or the supportive policy rules China has successively launched in the field of new energy vehicles in recent years, it is a clear positioning for the development of new energy vehicles.
Market penetration rate
In the first quarter of 2022, the penetration rate of the new energy vehicle market reached 19.3%. From the perspective of industry rules, when the penetration rate exceeds 15%, the industry can basically gain a firm foothold, and when the penetration rate rises from 20% to 50% , then it is the stage of rapid development.
The power battery industry relies on the characteristics of high technical barriers and high asset intensity in traditional manufacturing, which also provides a solid barrier for its future development.
These opportunities are not exclusive to the power battery industry. The entire upstream three systems (motor, battery, and electronic control system) that are closely related to new energy vehicles will become the high-quality layout targets of capital due to the catch-up of the new energy vehicle industry.
For OEMs that need to rely on power batteries, the layout of the lithium battery supply chain is almost a must for controlling the initiative in the manufacture of new energy vehicles in the future.
Supply chain
The supply chain is also critical for power battery manufacturers themselves. Many investors not only have layouts in various battery subdivisions, but also invest in the upstream raw material links of the power battery industry chain, lay out the industrial ecosystem, effectively reduce supply risks, and form a safe and stable supply chain system.
The reason why the power battery field is deterministic is also because it has a very high entry threshold, whether it is capital expenditure, market concentration, or global competition, so the effective competitors must be limited, and the industry competition results will definitely be the competition between giants.
Behind this stability is the moat built by the pioneers in the field of battery manufacturing with capital, technology, long-term accumulation and market testing.
Instead of challenging the giants, it’s better to forge your own route
Today’s power battery field is showing a competitive situation of “one superpower and many strong”.
However, since last year, the price of power battery raw materials has skyrocketed, reminding battery manufacturing factories to strengthen the layout of upstream raw materials, develop lithium iron phosphate and sodium-ion batteries, and avoid the impact of upstream cobalt, nickel and other scarce mineral resources on battery costs.
In the downstream of the battery industry, leading battery manufacturers are also actively investing in business model innovations such as quick battery replacement and charging, and are constantly trying new battery technology routes.
Opportunities
However, the leading edge of the first-tier battery manufacturers does not mean that other battery manufacturers have lost development opportunities.
For example, the engines of various fuel car factories have different adjustments and indicators, which create differences in engine experience and performance, and power batteries also have differences in different technical routes, segmenting their respective markets.
In the field of power batteries, each company can choose different technical routes, such as slow charging, 800V high-voltage fast charging, and lithium battery materials.
For power battery manufacturers, there are still many new routes and new opportunities in the future. Therefore, instead of fighting for the same piece of cake, it is better to make the cake bigger together and share.
Compared with “war”, “competitive iteration” is more suitable for the healthy development of the current power battery market.
Power battery is an industry with no ceiling – no matter energy density, battery life, charging speed or replacement of scarce materials, they are all technological innovation points that the battery industry can continuously break through.
Every new breakthrough and innovation in the power battery industry chain may bring about new applications of sub-scenarios or even the reshaping of the industry chain. This field requires long-term accumulation. For those who understand materials, electrochemistry, or manufacturing, it is a relatively friendly field.
In the field of power batteries, the boost of capital is like continuous fertilization. Capital judges investment objects based on the following five points:
- Valuation, capital prefers high-quality projects
- Customer verification, whether it can be loaded or not, and the specific situation of loading, can reflect the technical level of the power battery;
- Cost determines whether it is competitive in the market, and the control of upstream raw materials is related to the security of the supply chain
- Leading production control technology
- Advanced layout and control of new technologies. When the next generation of new battery technology comes out, we can continue to have a leading edge, so that we can see market growth and profits.
Capital has played a boosting role in the entire industrial chain of power battery cathodes, anodes, separator, and electrolytes.
Semi-solid and all-solid-state batteries, hydrogen fuel cells and related key components, and battery recycling have also attracted continued capital bets.
When second-tier power battery manufacturers are emerging in 2021, when the market is still holding a wait-and-see attitude towards power batteries, some investment institutions have invested in CATL, followed by investment in high-nickel, silicon-carbon anode electrodes, solid-state batteries, including solid-liquid hybrid fields, composite Current collectors, etc.
Manufacturers that have accumulated and invested in the battery field for many years can rapidly rise in the field of power batteries.
In the process of the rise and growth of the power battery industry, capital has pressed the accelerator button for the growth of the industry. Different from the staking field in the Internet field, although power batteries are hot, the popularity is not based on speculative disorderly competition, but is based on years of accumulation in traditional battery manufacturers and other manufacturing industries.
As predicted by many investors, the new energy vehicle and power battery industry is a definite investment target, and the cake of the industry will become bigger and bigger. The future development of the new energy vehicle industry is bound to be a process of dynamic competition and benign coexistence between power battery manufacturers and OEMs.
