BYD PK Ningde era, China's power battery double giant who is better?

The penetration rate of square-shell power battery batteries in China has been very high. Among domestic power battery production enterprises, BYD and Ningde times are typical representatives of the square-shell battery line. In 2017, the two companies divided up 40% of the market share. If in the past few years, the power battery industry will usher in a big reshuffle, then the “heads and bolts” of the two head companies in BYD and Ningde era will be the most compelling thing in the industry.

The two companies divided up 40%

We have measured and measured the installed capacity of several domestic power battery companies in 2017, which is the amount of batteries actually installed in the car. In terms of total amount, the two companies in the BYD and Ningde times divided up about 44% of the national market share.

2017 National Power Battery Enterprise Installed Capacity (GWh) Ranking

This data is calculated on the basis of car sales, and only calculates the domestic market, and does not consider the inventory and transportation of products in transit, and the production and sales data released by the company may differ slightly.

2017 Ningde era new energy passenger car battery supply structure

2017 Ningde era new energy passenger car battery supply structure

From the perspective of supply structure, in 2017, the Ningde era supplied the most to Beiqi New Energy and Yutong Bus. These two companies are the leaders of domestic new energy passenger cars and commercial vehicles respectively. “Xinxianghao” SAIC Group is in the era of Ningde. The list of Party A is in third place.

From the analysis of supply alone, the multiple alliances in the Ningde era have surpassed BYD's self-sufficiency. Before 2017, BYD had been sitting in the No. 1 position in China, but now it has to give up its throne to Ningde, which is also one of the results of self-produced, self-selling and internal supply. The more mature the new energy automobile industry in China, the more intense the competition for products. Although BYD's vehicle products have a good sales volume, it is obviously impossible to fight against the entire Chinese new energy automobile industry alone.

Comparison of Ningde Times and BYD's Power Battery Supply in 2017 (Special Vehicles Not Included)

So far, the two companies have performed very frequently. Whether it is the production capacity, the fight technology or the fight cost control, there must be a battle between BYD and Ningde.

Production capacity: slightly better in Ningde era

By the end of 2017, the total capacity of the Ningde Times was 17.09 GWh, and the new prospectus shows that when the Lishi Lithium-ion Power Battery Production Base project reaches production, the Ningde Times will add 24GWh of capacity, and the total production capacity will reach 41.09 GWh.

Although the Ningde era plans to raise 8.92 billion yuan for the "Huxi Lithium-ion Power Battery Production Base Project," it will take 36 months (around 2020) to complete the construction of the new capacity.

In the same period, the total production capacity of BYD's power batteries was 16GWh, of which lithium iron phosphate batteries accounted for 9GWh and lithium-ion batteries accounted for 7GWh. Of course, in order to expand production capacity, BYD also built a new 18GWh Sanyuan battery production base in Qinghai, and it is expected to be put into production in mid-2019. As a result, BYD's planned production capacity will reach 34GWh, lithium iron phosphate batteries will account for 9GWh, and three-element lithium batteries will account for 25GWh.

In the short term, BYD will take advantage of some capacity (after all, it will be able to expand production in 2019), but in the long run, the total production capacity in the Ningde era will be slightly higher than that of BYD, which is about 23% higher, except that the new production capacity in the Ningde era needs to be closer. 3 year construction cycle.

In any case, the capacity of these two leading companies has far exceeded the 8GWh requirement in the “Automotive Battery Industry Regulatory Requirements” (2017 Exposure Draft), which is also comparable to other competing companies.

Technical level: Chess rivals

By comparing the energy density of the three-way lithium square-shell batteries that can be mass-produced by the company, we can see that there is almost no difference in the technical level between BYD and Ningde.

In 2017, the energy density of the square-shell batteries supplied in large quantities in the Ningde era was between 190 and 210 Wh/kg. By the end of 2018, it is likely to increase to 210-230 Wh/kg. In contrast, by the end of 2018, BYD will mass-produce 220Wh/kg square shell batteries.

As for the medium-term technology line, BYD and Ningde are consistent in the era of development: research and development of high-nickel ternary materials for the positive electrode, silicon-carbon composite negative electrode lithium-ion battery. The use of high-nickel ternary materials as positive electrodes, coupled with graphite negative electrodes can increase the energy density of the square-shell batteries to 260 Wh/kg, while the silicon-carbon composite negative electrode is the key to breakthrough of 300 Wh/kg.

However, the realization of this vision must be based on a mature silicon-carbon material industry chain. According to BYD sources, the silicon-carbon composite supply chain is not yet available for supply. This is a concern for battery companies.

For solid-state batteries, the two companies have invested a lot of manpower and funds for research. However, mass production may not be possible before 2025. After all, the lithium ion battery injection process is very mature and has been widely used in the industry. However, the process of adding the solid electrolyte has not yet formed. The industry basically believes that it will be possible after ten years Realize the commercialization of solid-state batteries.

Pricing Advantages: Price War is Triggering?

According to relevant data, the price of power batteries at the end of 2017 fell by 20% to 25% from the beginning of 2017: the price of lithium iron phosphate power battery packs dropped from 1.8 to 1.9 yuan/Wh at the beginning of the year to 1.45 to 1 at the end of the year. 55 yuan / Wh; Sanyuan power battery prices from the beginning of the 1.7 ~ 1.8 yuan / Wh down to the end of the 1.4 ~ 1.5 yuan / Wh.

In the new prospectus, the unit price of Ningde Power Battery System in 2017 was RMB 1.41/Wh, unit cost was RMB 0.91/Wh, and gross profit margin was 35.25%. Compared with the overall market conditions, the Ningde era still has advantages in battery sales. With the expansion of production capacity, the price of future products will become lower and lower.

Similarly, the first electric network consulted BYD's insiders and got this answer:

“The price given by BYD is very competitive and slightly lower than the average price of the market. Our cost control is doing very well. At the same time, our cost is lower than other companies.”

As regards the prices of specific external sales, informed sources stated that they could not give accurate figures. “The conditions of each manufacturer are different (product types, purchase quantities, and bids, etc.), and the cooperation relationship is also different (internal procurement prices are lower than external ones), It can't be generalized."

In 2020, the price of the 1 yuan/Wh of the power battery system will be realized, which is the common goal of all battery companies. However, from the signal released by the OEMs now, the price of 1 yuan/Wh is still not low, and the price of the power battery system will be around 0.8 yuan/Wh, or even lower, such companies will be in the future. It is more competitive.

Ningde Times and BYD have certain advantages in pricing. With the expansion of production capacity, the gap with other companies will gradually widen. If the two set off a price war in order to seize the market, then this wave of AOE will surely affect many relatively weak companies.

Strategic Action: Joint Venture Listing VS. Split yourself

In this smoke-free war, the Ningde era has already shown its own stance.

In 2017, the establishment of SAIC Power Battery Co., Ltd. (hereinafter referred to as “SAIC”) and SAIC Times Power Battery System Co., Ltd. (hereinafter referred to as “SAIC Times”) was only a prelude to the Ningde era.

The former company was headed by the Ningde era, mainly developing R&D batteries. The latter company was headed by SAIC and was responsible for battery module and system development.

At this point, the Ningde era is already on the thighs of SAIC.

For the full year of 2017, SAIC Motor’s new energy passenger vehicles (excluding joint ventures) sold 44,000 vehicles, second only to BYD and BAIC New Energy. In 2020, SAIC Motor will strive to achieve a sales target of 600,000 vehicles. If a conservative estimate is based on a 40KWh battery installed (Roewe ERX5 battery capacity is 48KWh), 600,000 units will be 24GW. If SAIC can really achieve this goal, then its battery demand will account for almost 60% of the total capacity of the Ningde era, which will bring a steady stream of orders for the Ningde era.

The latest estimated value of the Ningde era is approximately RMB 131.2 billion. Once it is successfully listed, its own strength will be further strengthened. We will witness the birth of a Chinese domestic battery giant.

BYD is definitely not willing to lag behind.

BYD's power battery business splitting plan has been adopted by senior officials and is only waiting for the next announcement. This is the latest news. And BYD’s insiders say this:

“Last year, the company began to adjust its external strategy. It used to be internal supply from the group. Now encouraging the battery business to go out, the back battery has also set up an independent business group, encouraging more to accept external orders, and may later be separated from the group and become Independent companies may gradually evolve into external customers in the future, and of course internal customers will also maintain them."

As for the willingness of other companies to purchase, we have previously investigated five new car manufacturers. In addition to one car company that does not use BYD power batteries because performance batteries and models do not match, the other four said As long as the price/performance ratio is competitive, it is willing to cooperate with BYD on the battery business.

A company CEO engaged in passenger vehicle power battery system business revealed to the first electric network that the company has already started cooperation negotiations with BYD on the power battery business. He believes that BYD is one of the most promising companies in the field of power batteries.

We can predict that, as long as production is able to use and stabilize supply, and both the price and technical level are dominant, the external company’s intention to purchase BYD is very clear.

“Now the situation is very good. We have contact with domestic and foreign manufacturers for about half a year. The response is very good and our technology and production capacity are more recognized. However, the certification of products still needs time. External market sales will be reflected in 2019.”

If BYD can formally supply power batteries to the outside world in 2019, it is very likely that the entire company's business plan will be announced in 2018.

Conclusion

Now the shell batteries are gaining momentum in the country, but in terms of R&D, companies will inevitably be involved in different degrees in the case of batteries with three different systems, such as square shells, columns, and soft packs. From the analysis of domestic power battery investment expansion projects in the first three quarters of 2017, the overweight power battery investment is either already a certain size of company, or it is a new face with large capital support, and the scale of smaller battery companies has expanded production. Obviously slow down. In this section, if there is still capital to enter the power battery industry, either bypass the Ningde era and BYD (for example, choose another packaging system), or join the two camps.

By the end of 2017, there are already more than 140 power battery companies in China, including Ningde Times and BYD's head advantage in productivity, technology, and price. Other competing companies that rely on similar products need to be well weighed in order to survive in the cracks.

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