Wen 丨 Wang Lin
Editor 丨 Zheng Huaizhou
The automobile industry will always be a key link in industrial policy, and it is also the heart disease of China's manufacturing industry.
The reason why Germany and Japan can form a spinning and conical middle-class society and a strong precision machinery processing industry are inseparable from its global automotive industry. Because the automotive industry can usually account for 10% of a country's GDP, 1/3 of the manufacturing industry.
In the era of internal combustion engines, the embarrassing result of "market for technology" is that most enterprises in China abandon independent research and development, and the core technology is still in the hands of foreign capital.
Conquering the automobile is the only way to become a manufacturing power, and how to bypass the moat built by the fuel vehicle for a hundred years has become a breakthrough. In 2007, wan gang, who had been working at Audi headquarters in Germany for many years, was appointed minister of science and technology as a turning point, and an industrial "big bet" betting on new energy vehicles began.
As the heart of electric vehicles, power batteries account for nearly 40% of the cost of the vehicle. At that time, the key lithium battery technology and materials were in the hands of Japan and South Korea, and it was impossible to break through the power battery, and all the curves could not be overtaken.
01 Two options: The Sino-Japanese divide
Both oil-dependent countries have set their sights on new energy vehicles, but the choices are different, and the subsequent stories are not the same.
In 2009, China issued the "Automobile Industry Adjustment and Revitalization Plan", and the era of new energy vehicle subsidies has arrived.
The maximum subsidy for hybrid is 50,000 / vehicle, the maximum subsidy for pure electricity is 60,000 / vehicle, and the hybrid and pure electric buses above 10 meters can enjoy the discount of 420,000-500,000 / vehicle. The unprecedented support in the history of domestic industrial policy expresses the determination of policymakers to overtake in curves.
CSIS estimates that from 2009 to 2017, the Chinese government's direct investment in the new energy automobile industry exceeded 320 billion yuan, and the cumulative amount of purchase tax relief and other 70 billion yuan. If calculated according to the total investment of 390 billion yuan, it is equivalent to 42.4% of the total sales of new energy vehicles in China in the same period.
Almost at the same time, Japan, the hegemon of the consumer lithium battery era, chose another route. In 2010, Japan released the "Next Generation Vehicle Research and Development Strategy" from the past focus on pure electric vehicles to the simultaneous development of hydrogen fuel cell vehicles.
For Japan, betting on hydrogen fuel cells has its own reasons for self-consistency. On the one hand, in the field of hydrogen fuel cells, Japan has mastered the key "card neck" technology, with proton exchange membrane giant JSR and carbon fiber giant Toray. On the other hand, from the perspective of national security, the fuel cell catalyst platinum supplied by Japan's Tanaka precious metals accounts for 60% of the world's share, and Japan is rich in hydrothermal heat, which can basically provide the raw materials needed to produce hydrogen fuel cells, while the raw materials for power lithium batteries such as lithium, cobalt, graphite, etc. are dependent on imports.
Therefore, Toyota and Honda, the two leading japanese automobiles, also chose to bet on fuel cells in this "gamble". In addition to The Panasonic, which was bound to Tesla as early as 2008, has actively invested in the battery business, other manufacturers have not concentrated on related investments despite maintaining many patents and manufacturing skills.
Of course, China's policy "big gamble" is far from smooth sailing.
More than 1,500 lithium battery companies have appeared in China, but most of them are shell companies that are trying to get land and low-interest loans. Deception has also become a label that is difficult to tear off for a time in the new car-making movement. According to a number of typical cases published in 2015, 72 of the 93 new energy vehicle companies are cheating on compensation, and more than 760,000 vehicles have been defrauded. The total amount involved is 9.27 billion yuan.
Even in the policy of the edge of the enterprise, with the financial payment, the automaker only needs to sell the car to get subsidies, battery factories also lack the pressure of technological upgrading.
The result of such a vicious circle is that everyone is circling in the low-end quagmire. SAIC motor because it could not find a qualified battery manufacturer in China, had to set up a joint venture with the United States A123, and BAIC also established a joint venture with South KoreaSKI in 2013 in order to solve the battery problem.
However, large-scale subsidies have also allowed this industry that relies heavily on capital investment to quickly achieve a breakthrough from 0-1, and has also greatly improved the industry's attractiveness to capital and talents.
Figure 1: Sales of new energy vehicles in China (2012-2020)
At the enterprise level, all the foreshadowing of the division between the two countries can be traced back to Zeng Yuqun's separation of ATL's power battery division to establish CATL, which is today's "trillion battery empire" Ningde era.
In fact, ATL was originally founded by Zeng Yuqun, but in 2005, due to the sudden withdrawal of the major shareholder in the United States, it was acquired by the Japanese component giant TDK at a low price and became a pure Japanese-funded enterprise headquartered in Dongguan.
In 2011, due to the research and development needs of new energy vehicles, BMW Brilliance was looking for supporting power battery manufacturers around the world. At that time, ATL was already the largest battery supplier of Apple's mobile phone, BMW Brilliance believed that this represented that the safety of ATL batteries was guaranteed and could be used as a power battery, and proposed that ATL eat through the 800-page German production standard given by BMW as a premise for cooperation.
To BMW Brilliance's surprise, due to Japan's strong bet on fuel cells, ATL parent company TDK has a cold attitude towards power batteries and is unwilling to invest in production.
At that time, the scale of the domestic passenger car new energy vehicle market had begun to take shape, and Zeng Yuqun, who represented the docking of ATL and BMW Wei Land (Johann Wieland), keenly perceived this opportunity. Although the production difficulty of the car-grade battery is not at the same level as that of the mobile phone, he finally chose to gamble.
Because of the restrictions of national laws and regulations, wholly foreign-owned enterprises can not produce power batteries, Zeng Yuqun and Huang Shilin (then vice president of ATL R&D, currently vice chairman of NINGDE Times) decided to separate ATL's automotive power department and established Ningde Times in their hometown of Ningde, Fujian. In 2012, CATL nibbled down 800 pages of information and successfully broke into BMW's supply chain. With the endorsement of BMW, the Ningde era rose to fame, and then successfully became the supplier of Yutong and Jinlong Bus.
02 Whitelist "Sniper": Space for Time
Unlike Japan, which voluntarily gave up the first-hand king fry, South Korea continues to transfer the advantages of technology, research and development and production capacity of consumer lithium batteries to the power battery industry.
In 2010, backed by LG Group, which has an annual revenue of more than 100 billion US dollars, LG Chemical (LG New Energy) began to vigorously layout the power battery business, and built joint ventures in South Korea, China and Europe to prepare for the subsequent expansion of production capacity. With the advantages of technology and cost performance, it has become the main supplier of power batteries for well-known automobile brands in the world in the past few years, and has a great trend of unification.
As of 2015, six of the top 15 bus companies in terms of domestic shipments have reached preliminary supply agreements with LG and Samsung SDI, accounting for one-third of China's bus market.
In order to further squeeze the living space of domestic battery factories, Korean manufacturers launched a price war while expanding production, directly hitting the price to 1 yuan / Wh, and the factory price of domestic brand batteries is generally 2.5 yuan -3 yuan / Wh. In 2015, the largest shipment of Ningde era revenue just exceeded 5 billion, only 1/8 of Samsung SDI, for the price war basically did not fight back.
To this end, Ningde Times Huang Shilin also complained to the Securities Daily, "The vicious price war of some manufacturers, especially the dumping behavior below the cost, will make China's battery companies lose the space for survival and development, and also affect the further expansion of high-quality production capacity, which is not conducive to the development of our national power battery." ”
At that time, the THAAD incident broke out, and the political relations between China and South Korea fell to a freezing point. Therefore, from November 2015 to July 2016, the Ministry of Industry and Information Technology resolutely announced four batches of white lists, a total of 57 battery companies, none of which was selected by foreign capital, which means that electric vehicles equipped with lithium batteries of foreign companies cannot get any state subsidies.
Affected by this policy, the operating rate of Samsung SDI and LG Chem's China plants fell to less than 10% for a while, and South Korea's SKI simply closed its factory in Beijing. Panasonic's Dalian plant no longer produces in-vehicle batteries for the Chinese market. After losing the Chinese market, LG Chem's share of the global power battery market fell to 4% in 2016. Domestic enterprises have gained a precious time window, and in the same year, the market share of ningde times has risen to 16%.
Figure 2: After the whitelist, China's lithium battery market share began to surpass that of Japan and South Korea
In the face of excessive domestic low-end production capacity, the subsidy and whitelist system after 2016 has also changed from sunshine to precise support. In 2018, all new energy vehicles with a range of less than 150 kilometers were not subsidized. In 2019, the number of miles no longer subsidized was increased to 250 km.
As a result, naked swimmers gradually withdraw, weak manufacturers are either eliminated or merged, and Ningde Era, BYD, etc., which have high-end production capacity, have begun to become leaders. In 2018, CATL beat Panasonic, Samsung, etc. to become the first power battery supplier of volkswagen group. This key event marks that the quality of China's power batteries has not lost to Japanese and Korean manufacturers.
Figure 3: Power battery manufacturers supporting enterprises, according to public information collation
03 Shaping the chain: taking control
In 2010, in addition to the weakness of technology, the key factor that may hinder the further development of China's power batteries is that upstream materials rely heavily on imports, especially diaphragms and electrolyte lithium salts, etc., and face the danger of supply interruption at any time.
After ten years of layout, China has achieved a comprehensive breakthrough in the power battery industry chain.
The two giants of Tianqi Lithium and Ganfeng Lithium have opened the pace of global mine purchase under policy escort, and bought the global share of China's lithium ore resources to 30% in 2019. Among the four major materials in the middle reaches, Shanshan and Beiterui have seized the title of the world's largest producer of positive and negative electrode materials for lithium batteries, and Tianci Materials and Enjie Shares have bypassed the encirclement of Japan and South Korea in the field of electrolyte and diaphragm.
At the same time, CATL also launched vertical integration investment around the main business. For example, it has invested in its own suppliers, Leading Intelligence, Yongfu Shares, Tianhua Ultra Net, etc. Further upstream, it invested in The New Lithium Company of Canada and the Australian lithium mining company Pilbara Minerals.
Therefore, even if the white list was abolished in June 2019 and Japanese and Korean manufacturers made a comeback, the head advantage production capacity was not materially impacted. With strong bargaining power over material companies, the gross profit margin of power batteries in the Ningde era has stabilized at about 27% in the past two years. LG New Energy, on the other hand, has to plan to raise the price of cylindrical batteries by 10% this month due to China's increase in raw material prices. In the first three quarters of 2021, its gross profit margin was 18.3%, 33.5% and 18.8%, respectively.
Figure 4: Global power battery installed capacity in the first three quarters of 2021, data source: Gaogong lithium battery
The auto industry is no longer afraid of market share and no voice. Moreover, with the world's largest lithium battery industry chain and production scale advantages, China has successfully reduced the global lithium battery price cost by 90%.
With the "first year of electric vehicles" in 2020 as the watershed, the new forces represented by Tesla have leveraged the C-end passenger car market, and Europe and the United States have also established a policy and route for the development of electric vehicles at the national strategic height.
In this context, in 2021, production expansion has become the key word in China's new energy industry, South Korea is spending money, and Japan is turning.
In July 2021, the South Korean government ambitiously announced that it would invest $35 billion by 2030 to develop the country's power battery industry. LG New Energy, which is expected to break the record of South Korea's largest IPO, will land on the capital market at the end of January this year, and intends to raise more than 10 trillion won (about 57.3 billion yuan), except for some for research and development, the rest will be invested in expansion.
Japan is also trying to recover the "lost decade" in the field of electric power. In the face of global trends, nissan announced that it would suspend cooperation with Daimler and Ford to develop hydrogen fuel cell vehicles in the face of global trends, and plans to launch new vehicles in 2030 will be pure electric; in August, Honda Motor also terminated the production of hydrogen fuel cell vehicles.
Outside the three countries, new and old players in Europe and the United States have entered one after another. Northvolt, a battery company founded by former Tesla executives, completed the largest round of financing in history, reaching $2.75 billion; mining giants Such as Vale and Rio Tinto are scrambling to participate in the battle for lithium resources.
In the face of huge incremental space, the story of China,Japan and South Korea power batteries is far from over. In the struggle for the global market, there are only more variables and challenges.
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