Can CTC battery technology become the ultimate form of power battery?

CTC battery technology (full name: Cell to Chassis, battery-body integration technology, hereinafter referred to as CTC) has become a hot topic recently.

In September 2020, Tesla first released the CTC technology to match the new battery cells at Battery Day. A year and a half later, Tesla's Berlin factory in Germany, which uses CTC technology, was officially opened.

So far this year, the exposure of battery-body integration technology has continued to increase; in April this year, Leapmotor released the CTC battery-chassis integration technology and stated that it will be the first to be mass-produced and applied on the Leapmotor C01; in May, BYD released the CTB battery integration technology and announced that the first e-platform 3.0 model Haibao equipped with CTB (full name Cell To Body, battery-body integration technology) will start pre-sale; in early June, Nezha Auto released the Tiangong battery system using CTP technology (full name Cell to Pack, module-free battery pack, hereinafter referred to as CTP), and stated that it will officially release CTC technology at the end of next year.

Huatai Securities analyzed that the current power battery system technology upgrade is progressing in two directions. The share of module-free battery pack CTP is increasing rapidly and is gradually becoming the mainstream technology; CTC is about to go into mass production and is ready to go.

What is CTC technology?

The application of power batteries can be divided into battery design, processing, positive electrode materials, negative electrode materials and final assembly. In terms of assembly, the integration of battery cells is regarded as an important link in the production and manufacturing of new energy vehicles.

The traditional integration method is CTM (full name: Cell to Module), which assembles cells into modules and then installs the modules into battery packs, forming a three-level assembly mode of "cell-module-battery pack". However, due to the large number of parts in the module battery pack, the space utilization rate is 40%. In the past few years, the focus of battery system integration has been on improving the standardized battery module size.

Huatai Securities analyzed that with the increase in demand for driving range, 390 and 590 modules that can improve space utilization were proposed. The size of a single battery module continued to increase, leading to the emergence of module-free battery pack CTP solutions.

CTP eliminates the need for standardized modules and groups the cells directly into battery packs, which increases volume utilization by 15%-20% compared to traditional methods, and also improves energy density. As electric vehicles have higher requirements for convenience and lightness, Tianfeng Securities believes that CTC battery-body integration technology is an important development direction for future electric vehicle battery grouping technology.

CTC refers to the integrated design of batteries, chassis and underbody. Simply put, it means placing the battery cells directly in the vehicle chassis. Different from the previous design of separate chassis and battery pack, it improves the energy density of the battery by improving space utilization. In addition, it can also save raw materials and correspondingly expand the volume of the battery cells that can be installed, thereby increasing the volume energy density and improving the cruising range.

Why are companies rushing to increase their investment in CTC?

At present, many domestic and foreign automakers and battery manufacturers have set their sights on breakthroughs in battery-body integration technology. From Tesla’s prototype to Leapmotor and BYD’s follow-up, many related companies have accelerated the layout of battery-body integration technology.

Tesla announced CTC technology for the first time at Battery Day 2020. Last year, Tesla demonstrated the Model Y equipped with CTC battery chassis integration technology at the Berlin factory open day. In March last year, Volkswagen Group publicly stated that it would consider CTP and CTC in the next generation of battery integration technology. In June of the same year, Volvo also revealed information on battery technology such as the next generation battery CTC, and stated that the company's third-generation battery system integration technology battery pack will adopt CTC solutions and square cells.

Among battery manufacturers, CATL announced earlier this year that it will officially launch highly integrated CTC battery technology around 2025. In addition, LG Energy Solution also has related technology layout.

Behind the increase in investment by many companies are the advantages and market prospects of CTC. Guosen Securities analyzed that the performance advantages of the CTC solution are reflected in light weight, larger space, longer battery life, and stronger performance; in terms of space, the vertical space is increased by 10mm, and the battery layout space is increased by 14.5%; in terms of battery life, the battery insulation performance is optimized, and the battery life is increased by 10%.

Shengang Securities also pointed out that the essence of CTC is to combine the upper shell of the battery pack and the lower floor of the vehicle body into one. Overall, the use of CTC technology has more advantages than disadvantages, which will help automakers reduce costs and increase efficiency. Models equipped with CTC will achieve higher gross profit margins and mileage. In the view of Zeng Yuqun, chairman of CATL, the cost of new energy vehicles under CTC technology can directly compete with fuel vehicles, and the passenger space is larger.

Chen Zikun, chief analyst of the electric new energy industry at GF Securities, believes that as battery manufacturers extend their products in product links, such as CTC extending to chassis, the output value of each vehicle increases, and the increase in gross profit is sustainable. Western Securities analysts believe that in the case where battery energy density is difficult to increase significantly, battery-body integration technology is an effective solution, and predict that this technology will develop rapidly in the future.

However, CTC battery-body integration technology also has certain drawbacks. If a car breaks down and the battery needs to be repaired, this technology may require the chassis to be replaced as well, increasing maintenance costs.

Tianfeng Securities believes that battery-body integration technology is in the stage of transition from concept to mass production; when technology is still in the conceptual stage, it usually seems far away, but when the technology begins to be implemented, the progress often exceeds expectations. With the entry of a number of companies, CTC technology is expected to accelerate the realization of large-scale mass production applications. Guohai Securities predicts that the market space for battery-body integration technology in my country may reach 850 billion yuan in 2030.