In May this year, BYD announced that it will supply power battery modules with core technologies to the new energy automotive market. Just one month later, BYD has “promoted†the battery and made progress. On June 6, BYD chairman and president Wang Chuanfu revealed at the shareholders’ meeting held in Shenzhen headquarters that BYD’s battery export has been discussed with several big passenger car brands, and some of them have entered a substantive stage.
The reporter has been informed exclusively that BYD is currently negotiating with the Guangzhou Automobile Group, FAW Group, and SAIC Motor Co., Ltd.'s passenger car brands on the cooperation of power batteries, and the list of cooperation negotiations is still expanding. “In the past, BYD’s batteries had a small scope for external sales. Starting from the beginning of this year, BYD’s battery division officially began to allow sales of self-produced automotive power batteries for external sales. The car companies that are interested in negotiating these months are indeed not Less.†Informed sources disclosed in an exclusive interview with reporters.
The relevant person in charge of Guangzhou Automobile Passenger Vehicle told the reporter that there is indeed a contact with BYD on the power battery cooperation, but it is impossible to disclose too much information.
As a major competitor of BYD in the field of new energy vehicles, SAIC Group also appeared in the above list of cooperation negotiations, which was surprising, especially since SAIC and Ningde Times New Energy Technology Co., Ltd. (hereinafter referred to as “Ningde Timesâ€). In the context of the announcement of the joint establishment of a power battery company, such contacts are significant.
In response, the person in charge of the SAIC Passenger Vehicle replied in an interview with reporters on June 22: “Shangqi did not cooperate with BYD in the battery field. Currently, SAIC and Ningde have established separate joint ventures in power batteries and power battery systems. The company has achieved full industry coverage from the R&D side to the manufacturing side, which can satisfy the SAIC's new energy vehicle sales demand for power batteries."
However, there are also long-term concerned about the field of power batteries told reporters, "Salva did buy batteries from BYD before, but the number is not much. Now, there may be contact, but there should be no cooperation, SAIC own battery in this It has been a smooth manager. It is also important to understand the competitors.
At present, BYD’s sales of power batteries have evolved from the past to “proactively attacked†to take the initiative.
According to the above-mentioned sources, BYD is likely to sign a power battery cooperation company in the second half of the year, and it is expected that substantial sales will be formed in one year.
Now, the capital market has paid close attention to power batteries. Its raw material prices have remained high for a long time, and coupled with the high valuation of more than 100 billion yuan in the Ningde era, the topics related to power batteries are very popular in the capital market. In this context, BYD, who has long been cultivating the field of power batteries for a long time, will not rule out the separate listing of the power battery business. The current external cooperation may be paving the way for future listings.
Switch to battery raw material supplier
BYD's road to independent battery is expanding in depth. "Because BYD is both a battery manufacturer and an automotive manufacturer, and there are doubts about some of the vehicle manufacturers, BYD will use the supply batteries and supply them to OEMs in the form of third party PACK manufacturers." BYD's shareholders meeting on June 6th On the other hand, Wang Chuanfu responded to the most concerned battery issues. He also revealed that since the power battery is the core component of the electric vehicle, matching the downstream manufacturers requires a long development cycle, and mass production is expected to be one year later.
This statement is also confirmed by the supporting manufacturers related to BYD's power batteries: "The battery packs for the sale of power batteries are being discussed, and some supporting solutions are being discussed, and there will soon be progress."
This scene is Wang Chuanfu and BYD dream of. In the past 2016, compared with the expansion of other power battery companies and the high valuation under the intervention of capital, BYD's power battery business is in a phase of decline in competitiveness due to the long-term closed supply. According to public data, BYD’s power battery capacity in the first half of 2017 was affected by the continued decline in sales of new energy vehicles. The export of power batteries and the marketization of the automobile industry chain have become BYD's most wise choice. "There is a cycle time problem in battery export matching. Whether it is a lithium iron phosphate battery or a triple battery, our battery capacity, quality, technology, and cost advantage are obvious." Wang Chuanfu stated at the shareholders' meeting that BYD will soon supply batteries. The identity of the business entered the power battery market.
To be precise, BYD's new identity is a raw material supplier for batteries. In the face of the hesitation of new energy car companies regarding the confidentiality and control of core components, BYD chose to take a step back. Starting from battery raw materials is a helpless move as well as a thoughtful layout.
At present, the new energy vehicle power battery is one of the most critical and difficult core components and it has always been a hot spot for the capital. This trend of price increases has also spread to the field of power battery raw materials, making one of the most important raw materials for power batteries - lithium phosphate prices remain high. At present, China's lithium phosphate quotes around 12-16 million yuan / ton. In response, Ma Peihua, vice chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), bluntly stated at the International Summit Forum on Lithium Industry in Qinghai Province on June 21 that the current price of lithium phosphate was excessively high and a reasonable lithium carbonate price should be 3-5 yuan/ton.
For BYD, which has been laid out in advance in the raw materials sector, its advantages are gradually emerging. BYD has previously invested in the establishment of a new battery plant in Qinghai. In the future, the new plant will form a power battery production capacity of 10GWh per year, which will enable price control of raw materials.
Running with Capital Foam
The incitement that capital brings to the power battery market makes it impossible for anyone involved to avoid it. BYD, anxious to open up its power batteries, is doing so. The Ningde era, which has become more closely tied with capital, is also true.
On June 15th, the Ningde era published a listing counseling announcement, which means that the new energy battery giant is about to start an IPO. At present, the Ningde era with a market value of 120 billion yuan is the darling of the capital market. However, it is necessary to be careful that the business logic behind it will never change because of the buoyancy of capital. “At the moment, the market for capitalization in the power battery market is serious, mainly because demand for new energy vehicles has concentrated and led to insufficient supply and demand for power batteries, but this imbalance will be broken in two years. In fact, from now on, The production capacity of China's power battery has shown signs of excess.†said a senior person who has long been concerned about the power battery field.
According to public data, as of the end of 2016, China’s power battery capacity has reached 120GWh and is expected to exceed 200GWh by the end of this year. At the Qinghai Lithium Industry International Summit on June 21st, Fang Jianhua, the president of the New Energy Vehicle Venture Capital Sub-Fund of the National Science and Technology Achievements Fund, publicly bombarded capital to kidnap the power battery industry. "This year, the market demand for power batteries is less than 40 GWh. With the rapid advancement in battery technology, two to three years later, the battery factory is now a pile of scrap iron."
At present, the government's subsidy policy for new energy vehicles and upstream and downstream industrial chains is further tightening, and the subsidy for power batteries also adopts a gradual decline policy. After the government's related financial subsidies were eliminated in 2020, power battery companies would only be able to compete by virtue of their true capabilities.
In this context, BYD has been doing a long-term layout. In addition to the road to power battery independence, BYD is also preparing to open up overseas markets through technology upgrades. Currently, BYD has begun to participate in the international competition of power batteries, and the battle for technological development to reduce the cost of power batteries has also begun. In the future, BYD will further increase its R&D and investment in key materials, system integration technologies, manufacturing equipment and processes of power batteries.
The biggest advantage of BYD is that, in cooperation with Qinghai, it cuts into the upstream of the industrial chain, which not only helps it to make full use of the abundant lithium resources in Qinghai, but also captures the lifeline of raw materials. BYD's price advantage in power battery raw materials will gradually turn into its price advantage in the highly competitive power battery field.
The next question is whether BYD can strike a balance between the construction period of the power battery supply chain system and the waiting time of the new energy automobile main engine plant, so as to outperform the time gap of the power battery capital bubble being punctured. Now, everything is still unknown.
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