Author: Li Mingzhu
Self-built battery factory, end up grabbing lithium mines, is the end of new energy car companies really "BYD"?
Recently, Xiaopeng Motors issued a statement: "In response to the so-called 'self-developed battery' rumors in some media, we solemnly declare that Xiaopeng Motors has no battery self-development plan. The company has always focused on continuously creating better products for users who love Xiaopeng. intelligent electric vehicles."
Although there is no direct self-developed battery, Xiaopeng has already made plans in the battery field: Zhongxinhang, which is listed on the Hong Kong Stock Exchange, is one of its 15 cornerstone investors; Honeycomb Energy, which recently submitted a prospectus on the Shanghai Stock Exchange , Xiaopeng spent tens of millions in December last year to participate in its seventh capital increase.
Some new energy car companies have already "rolled up their sleeves" to build batteries in person: in October this year, Weilai invested 2 billion yuan to establish Weilai Battery Technology (Anhui) Co., Ltd.; in the same month, GAC Group established Yinpai Battery Technology Co., Ltd. The investment is 10.9 billion yuan.
Mercedes-Benz, BMW, Volkswagen, Tesla and other car companies have also entered the battery track through self-built battery factories or equity investment.
While car companies and battery manufacturers are in-depth cooperation, they have also started a deep game.
However, according to estimates by McKinsey, a world-renowned consulting firm, car companies must produce at least 500,000 new energy vehicles in a region or have a battery production scale of more than 15GWh before self-produced batteries may have a cost advantage.
At present, only Tesla and BYD are the only car companies with an annual sales volume of more than 500,000 new energy vehicles in the world.
For other car companies, whether self-built battery factories can reduce costs is still a question mark.
The further downstream the lower the gross profit margin
At the 2022 World Power Battery Conference, Zeng Qinghong, chairman of GAC Group, once said that the current upstream price of the power battery industry chain is too high, and the price pressure is directly transmitted to the OEM. The cost of power batteries has accounted for 40% to 60% of the total cost of the car. %.
Then he half-jokingly asked: "Aren't I working for CATL?"
Although it is a joke, it also highlights the current difficulties faced by domestic new energy car companies: profits are distributed upstream, and most car companies are still at a loss.
Take the net profit of the previous three quarters as an example. The upstream core enterprises Tianqi Lithium Industry and Ganfeng Lithium Industry achieved a net profit of 15.98 billion yuan and 14.79 billion yuan respectively. The core enterprise in the battery field Ningde Times achieved a net profit of 17.59 billion yuan. And BYD in the vehicle field achieved a net profit of 9.311 billion yuan, while new carmakers such as Weilai and Leapmotor were all at a loss.
From the perspective of gross profit margin, the overall trend is also "the further downstream, the lower".
In the first three quarters, the gross profit margin of upstream Tianqi Lithium Industry was 85.53%, and that of Ganfeng Lithium Industry was 55.92%.
Among the battery material manufacturers in the middle reaches, the gross profit margin of the electrolyte leader Tianci Materials is 40.5%, the diaphragm leader Enjie shares has a gross profit margin of 49.66%, the battery manufacturer Ningde Times has a gross profit margin of 18.95%, and the downstream car company BYD has a gross profit margin of 15.89%. Not to mention there are many new energy vehicle brands that are still at a loss.
In this context, car companies have chosen "upward layout" by coincidence.
On November 11, BMW Group announced that its Shenyang production base will undergo a large-scale expansion of power battery production.
The project is invested by BMW Brilliance with a total investment of RMB 10 billion.
On October 27, GAC Aian announced the establishment of Yinpai Battery. The company is jointly invested by GAC Aian, GAC Passenger Vehicle, and GAC Commercial and is controlled by GAC Aian. Industrialization construction and the production and sales of independent batteries.
On October 21, Weilai Battery was established with a registered capital of 2 billion yuan. Its business scope includes battery manufacturing and battery sales.
On October 11, Honda Motor and LG New Energy jointly announced that they will set up a new joint venture electric vehicle battery factory in Ohio, USA. The two companies promised to invest at least US$3.5 billion.
The battery link has become the core of the layout of car companies
Why does the battery link become a "battlefield" for car companies?
First of all, because power batteries account for a high cost of new energy vehicles, they are very important.
Mo Ke, the chief analyst of True Lithium Research, believes that when the development of fuel vehicles is in full swing, the strength of an auto company generally depends on whether it can grasp the production capacity of the engine.
In the era of new energy vehicles, batteries not only account for a high cost, but are also the core components, so OEMs will hope to enter the battery segment.
Mi Lei, the founding partner of Zhongke Chuangxing, said that if you disassemble the BOM (bill of materials) of new energy vehicles, you will find that more than 1/3 of the cost of electric vehicles is on the battery.
Therefore, considering the production cost, it is understandable for car companies to enter the battery field.
"The current industry pricing power of power batteries is mainly concentrated in the hands of manufacturers with strong R&D capabilities, such as Ningde Times. From the perspective of the industry chain, if car companies rely too much on upstream battery manufacturers to a certain extent, it may not be possible in the long run. It's a good thing."
Gou Guoju, investment director of Zhongshi Capital, who has been paying attention to the investment in the automotive segment for a long time, also told the Securities Times reporter: "The main purpose of the car companies entering the market is to grasp the initiative of the supply chain, put the industry under their own company name, and improve the ability to guarantee supply. "
It is understood that both Weilai and Xiaopeng have delayed delivery due to supply chain problems such as batteries in recent years, which has affected the normal rhythm of production and sales.
"In the long run, the leading car companies may adopt the strategy of 'self-made + outsourced' in the battery field in the future, changing the situation of being controlled by others in the battery field, and it is also conducive to the development of their own long-term competitiveness." Senior researcher at Zhongnan University of Economics and Law Li Yandong said, "It may become a trend for car companies to develop their own batteries."
Wang Ke (pseudonym), an investor who has in-depth layout of the upstream and downstream of new energy in the primary market, told reporters that the deepening of the upstream investment of car companies can enhance the bargaining power in the industrial chain. Looking at the entire industry chain in the future, the growth of car companies Profitability will also be enhanced because of this investment layout, and BYD is a typical representative.
Mi Lei believes that some car companies are also "forced to do nothing" in the layout of power batteries - other manufacturers have entered the game, and if he does not enter the game at this time, it may lead to "one step behind, step by step behind".
What are the advantages and disadvantages of self-built battery factory?
In Mo Ke's eyes, "car companies make batteries" does not necessarily make batteries themselves, and the greater opportunity may lie in battery packs.
It is very important to have the ability to assemble battery packs, because the battery pack must be matched with motors and electronic controls, and the battery capacity of car companies should be reflected in this aspect.
Gu Guohong, deputy director of Qingdao Automotive Research Institute of Jilin University, also believes that there are still many areas that can be optimized and improved at the battery pack level, and the threshold for Pack development is relatively low. It is a good choice for car companies to intervene in Pack research and development.
However, for car companies with self-built battery factories, their ambitions are obviously not limited to "making a good pack".
According to GAC's plan, after GAC makes its own batteries in the future, it may become a "three-legged walking" model in the battery field: one part will continue the joint venture and cooperation model, and purchase batteries from partners such as Ningde Times and China Innovation Aviation; the other part Pure procurement, with cost-effectiveness as the key consideration, purchases batteries in the market; the last part uses self-developed batteries.
It can be seen that ensuring the "diversification" of battery supply is one of the main demands of auto companies to build their own battery factories.
Gou Guoju said that the entry of car companies will definitely bring about changes in the industry structure.
Taking NIO and GAC as examples, after building their own factories, under the premise of technology and quality assurance, it can be foreseen that the proportion of purchasing through independent suppliers will definitely decline gradually, while the supply status of self-built or joint venture battery factories may change from "Three suppliers" began to gradually increase, and even became the trend of the largest supplier.
Yu Qingjiao, secretary-general of the Zhongguancun New Battery Technology Innovation Alliance and chairman of the Battery Committee of 100, said: "I personally think that battery manufacturing is more professional than battery factories, and the proportion of auto companies producing batteries themselves and joint ventures with battery companies will not be too high. Purchasing batteries is still the mainstream, but suppliers will be diversified so that car companies can have more say."
Some car companies also hope to enhance their bargaining power in the battery field by building their own battery factories.
But from the perspective of cost and return, can self-built battery factories really help car companies "save money"?
In the "China embraces the world" auto industry innovation forum held on November 25, Gu Jianmin, CTO of Valeo China, gave different views.
Gu Jianmin believes that batteries are expensive because upstream raw materials are rising in price, and the gross profit margin of Ningde era is only about 20%.
According to McKinsey data, in the battery cost, the material cost is close to 80%, and most of the cost is in the raw material.
The cost of batteries will not be reduced due to the exit of OEMs.
It is understood that the soaring price of lithium resources this year is the core reason for the price increase of batteries.
According to Wind data, on December 5, the average price of domestic battery-grade lithium carbonate was 565,500 yuan/ton, an increase of nearly 12 times compared with 45,000 yuan/ton in the same period in 2020.
In the price increase announcements of many car companies this year, the price increase of raw materials is also listed as an important reason.
For example, on November 23, BYD released the "Explanation on Model Price Adjustment", stating that it will adjust the official guide prices of new energy models related to Dynasty, Ocean, and Denza, and the increase range will range from 2,000 yuan to 6,000 yuan.
Among them, "the price of main raw materials for batteries has risen sharply since the second half of the year" is one of the main reasons.
Gu Guohong believes that the main driving force for auto companies to build their own battery factories is the high price of existing power batteries, but this is caused by the front-end material market, not by the battery companies themselves. With the release of production capacity in the supply chain, the market supply will be more abundant, and the relative competitiveness of self-built battery factories will be further weakened.
The game of "competition and cooperation" is heating up
Car companies and power battery companies have been cooperating and competing.
The self-built battery factory of car companies is the embodiment of this kind of game entering "white heat".
Although the upstream mining companies are currently distributing most of the industry's profits, the price of lithium resources is "cyclical" and cannot remain high forever.
When the boom fades, who will become the dominant player in the industry chain between power battery manufacturers and new energy vehicle companies?
It's a game.
It can be seen that the battlefield between the two sides will not be limited to the battery field, but will move towards upstream resources.
Yu Qingjiao said that Tesla, BMW, Volkswagen, GM, BYD and other car companies have joined the army of "scrambling for mines" to strengthen their control of upstream resources.
On the evening of November 7, GAC Group and HEC announced that they would join hands to increase mineral resources.
According to the announcement, Guangzhou Automobile Parts Co., Ltd., a subsidiary of GAC Group, Tongzi County Shixi Coal Industry Co., Ltd., a subsidiary of HEC Holdings, and Zunyi Energy Minerals (Group) Co., Ltd. signed the "Joint Joint Venture Contract" to establish a joint venture company in Guizhou. Engaged in relevant mineral geological exploration and investment management of mineral resources.
In November, General Motors stated that the company has reached a cooperation with Brazilian miner Vale. The company will provide GM with 25,000 tons of nickel-containing battery-grade nickel sulfate per year, which can be used by 350,000 electric vehicles per year. The transaction will start in 2026. Effective in the second half of the year.
In October, Mercedes-Benz signed a supply agreement with Rock Tech Lithium, a lithium material supplier. The latter will supply the former with 10,000 tons of battery-grade lithium hydroxide per year, which can be used by 150,000 vehicles. The transaction scale is 1.5 billion euros. Starting in 2026...
Power battery manufacturers are not idle either. Recently, the battle for "sky-high price lithium mines" has started again, and Ningde era is also involved.
According to the National Enterprise Bankruptcy and Reorganization Cases Information Network, on November 28, the administrator of Yajiang County Snowway Mining Development Co., Ltd. announced that after the selection of the expert review team, Ningde Times was recommended as the reorganization investor, and GCL Nengke was the backup investor. Select restructuring investors.
In the era of fuel vehicles, it is often the vehicle companies that have the right to speak in the industry chain.
In the new energy era, who will have the right to speak in the industry from the downstream to the upstream battery manufacturers and new energy vehicle companies?
Perhaps it will take time to answer.
In Mi Lei's eyes, car companies need to do three things if they want to succeed in the battery field: first, car companies can find talents who have both rich electrochemistry expertise and work experience in battery manufacturers; second, they can master upstream The material end of the industrial chain (anode and cathode materials, electrolyte) may form a close binding relationship with suppliers; third, the terminal automotive products can be recognized by the market, and scale up on a large scale, resulting in economies of scale.