A look at the changing Haichen Energy Storage from a high-quality supply chain

Winners in the business world are always labeled with many dazzling labels, such as bold decisions and popular marketing, as if these are all the secrets to their success. However, the long-term success of a company is not only the visible tip of the iceberg, but also relies more on the industrial ecology under the iceberg.

As a high-growth track in recent years, observing the billion-dollar companies that have emerged in the new energy industry, the focus is all on their strong technical background and market capabilities. However, the supply chain system that supports these giants rarely appears in the spotlight.

Haichen Energy Storage is undoubtedly a company worthy of scrutiny.

Haichen Energy Storage was established at the end of 2019. In less than five years, it has ranked among the top 5 in global energy storage battery shipments, competing with industry veterans such as CATL and BYD. This speed has made the industry never stop analyzing the front end of Haichen Energy Storage, but the supply system that supports Haichen Energy Storage's huge products is little known.

Haichen Energy Storage Xiamen Energy Storage Industrial Park

Not long ago, the Ministry of Commerce, the Ministry of Industry and Information Technology, the Ministry of Ecology and Environment and other eight units jointly released the list of the third batch of national supply chain innovation and application demonstration cities and demonstration enterprises. Among the 46 demonstration enterprises, Haichen Energy Storage was successfully listed, becoming the first energy storage battery company selected in Fujian Province.

As a fast-growing new energy battery manufacturer, the supply chain is an indispensable cornerstone for building the entire Haichen energy storage ecosystem.

So, what did Haichen Energy Storage’s supply chain do right?

01Haichen Supply Chain Enters the Era

From its inception in 2019, Haichen Energy Storage has grown to the fifth largest global energy storage battery company in terms of shipments by 2023. The result is rapid mass production, rapid capacity replication, rapid delivery, and rapid product iteration.

But achieving this was far from as natural and easy as it later appeared, but rather involved a series of difficult negotiations and introductions with suppliers.

At the same time, compared with the traditional manufacturing supply chain, the battery supply chain has at least three industry-recognized bottlenecks:

1. The battery industry chain is a complex subject that involves both electrochemistry and physical equipment, and the entire supply chain has a higher degree of complexity and integration.

At the same time, battery production involves a lot of tedious and meticulous work, and there are a large number of process parameters that need to be controlled. Any process parameter details and the raw materials that match them are crucial to the quality and performance consistency of the battery.

HiTHIUM Energy Storage Battery Product Family

Haichen Energy Storage has encountered such a bottleneck problem in recruiting supply chain talents: some mature automotive supply chain talents have difficulty adapting to the battery industry chain when they come to Haichen Energy Storage.

Automobiles are already known as the most complex and best-selling mature industrial products.

2. The supply of the four major upstream materials of batteries (positive electrode, negative electrode, diaphragm, and electrolyte) involves fluctuations in a large number of bulk raw materials. How to balance the commodity cycle while keeping up with the pace of the lithium battery industry is extremely challenging.

In particular, the industrial chain involves a large number of scarce metals, from "Cobalt Grandma" and "Nickel Uncle" to "Lithium Travels the World". It can be said that the supply of raw materials and the out-of-control of procurement costs have always been a sword of Damocles hanging over the heads of battery factories.

3. In such a complex system, it is also necessary to ensure the implementation of ESG in the entire supply chain system, that is, to ensure that one's own production process and supply source products are green and dual-carbon. After all, lithium batteries are the core link of dual-carbon and green economy.

There are no shortcuts from product to supply-side construction, only countless nights of communicating with suppliers and confirming plans and prices.

If you ask Haichen Energy Storage which period left the deepest impression on them, the industry's electrolyte shortage period from 2021 to 2022 is an unforgettable nightmare for them.

The electrolyte plays the role of conducting electrons between the positive and negative electrodes in the battery. It is one of the key materials of lithium-ion batteries and is called the "blood" of lithium-ion batteries.

Lithium hexafluorophosphate, the core raw material of the electrolyte, has soared from 113,000 yuan/ton in 2021 to 590,000 yuan/ton in 2022 due to difficulties in increasing production capacity. Even with this money, you can't buy the goods. Even the proud leading lithium battery companies have to pay high advance payments to "grab the goods."

In this context, the pressure faced by Haichen Energy Storage, which has only been established for less than two years, is obvious. If it simply competes on prepayments and customer relationships, it cannot compare with other giants. But surprisingly, Tianci Materials, as the leader in hexafluoro, ensures a stable supply of electrolyte for Haichen Energy Storage.

This kind of cooperation does not only come from the current relationship, but also from long-term recognition. Before the formal establishment of cooperation, the Haichen supply chain team visited the company many times and conducted in-depth technical exchanges on the electrolyte solution, which allowed Tianci to see the solid culture of the company's engineers. Tianci concluded: "This is a company that is serious about making products and has technical reserves. It is very likely to become a stable and large customer in the future."

From another perspective, this judgment is also correct. Although it has been established for a short time, Haichen Energy Storage has shown very strong and impressive development momentum in terms of both capacity expansion rhythm and development momentum.

Whether from R&D capabilities or the resilience and hard work of the company's operations, Tianci can see that supplying Haichen Energy Storage will be a lucrative investment. And this is indeed the case. Even after the supply and demand relationship reverses in 2023, Tianci Materials will still be the top priority supplier of Haichen Energy Storage electrolyte materials.

In this initial stage when the platform was small and the market supply was drastically unbalanced, Haichen Energy Storage relied on its well-established reputation to establish good cooperative relationships with the leading suppliers of major battery materials and accumulated a group of high-quality supplier partners.

Now Haichen Energy Storage has passed its early days of tightrope walking and has begun a more comprehensive supply chain evolution.

For example, in terms of supplier management, Haichen Energy Storage is more scientific and meticulous. It prioritizes the development of local suppliers based on the high-standard VDA6.3 quality system of the German automotive supply chain and provides supplier performance evaluation results output every year. The review rate of high- and medium-risk suppliers is 100%, and the proportion of low-risk suppliers has exceeded 80% in the past two years.

By combining the scale of the supply chain with the stable expansion of core products, the era of Haichen Energy Storage Supply Chain 2.0 has been established, a production, supply and marketing system that continuously reduces costs and increases efficiency and is very stable.

In fact, looking back at the past 2023, Haichen Energy Storage's growth logic has changed significantly. With cognitive power, growth power, innovation power, management power and agility, it pursues higher-quality growth. To sum up, in the 1.0 era, efficiency is paramount, and the supply chain cooperates with the company's rapid expansion; in the 2.0 era, product iteration and the scale and reputation of the supply chain form a benign interactive effect. Haichen's supply chain, which is about to enter the 3.0 era, = high-dimensional global vision layout + comprehensive coordination of product innovation + continuous updating of supply chain details.

02Haichen Supply Chain: Continuous Iteration of Long-termism

Wang Pengcheng, co-founder and president of Haichen Energy Storage, once defined the next stage of Haichen as follows: "Haichen Energy Storage will forge the world's leading new quality productivity of energy storage through new quality cognition + new quality values ​​+ new quality innovation."

In terms of the supply system, continuous iteration, continuous improvement, and full system empowerment based on digitalization are the best answers in the Haichen Energy Storage Supply Chain 3.0 era.

In terms of specific actions, the core is the smart factory. Haichen Energy Storage's Chongqing project has planned a new type of factory that integrates "smart factory, zero-carbon factory, and garden factory".

A digital twin platform will be built here to achieve fully automated operation. The entire chain from raw material storage to product production and then to finished product delivery will be automated, and an intelligent warehousing and scheduling system will be built to achieve automated logistics transfer.

Haichen Energy Storage Chongqing Base Phase I has been put into operation

Based on the platform of building a smart factory, Haichen Energy Storage Supply Chain now deeply integrates the products of partners in all aspects of R&D, design, system, certification, safety, quality, etc. With these foundations, Haichen Energy Storage can make each process smarter, increase production line efficiency by 30%, improve automation level by 26%, and reduce manufacturing costs by 25%.