A tour of the four major overseas power battery giants

Some time ago, I saw the news that Tesla's factory in China was going to cooperate with LG. I felt deeply that I had knowledge gaps in the battery field, so I spent some time collecting information on the four major overseas power battery giants and made a simple sorting and summary.

1. Samsung SDI

Samsung SDI was founded in 1970. In 1999, it successfully developed the industry's largest capacity 1800mAh round lithium-ion battery, and has since entered the lithium battery field. In 2008, Samsung SDI and Bosch jointly established the power battery company SBLimotive, entering the automotive power battery field; in 2015, Samsung SDI wholly acquired the world's leading battery company MSBS, and successively established automotive power battery factories in South Korea, China, the United States, Europe and other places.

Samsung SDI has more than 15 years of experience in mass production of lithium-ion batteries, and now sells more than 1 billion batteries a year. Samsung SDI's automotive power battery products are mainly square batteries with a single capacity and high energy density. There are currently 37/60/94Ah products that can be used in EV, PHEV and other vehicles. The positive electrode material mainly uses ternary NCM materials, and at the same time actively promotes the production of 21700 cylindrical batteries.

According to SNE data, Samsung SDI's automotive power battery shipments were 1.1/1.3/2.4 Gwh in 2015/2016/2017, with year-on-year growth rates of 170.8%/18.2%/84.6%, ranking 10th/9th/5th in global shipments.

Since Samsung SDI entered the power battery field, major automakers in Europe, the United States and Asia have started cooperation projects with it, and it has been selected as the core battery supplier for more than 30 electric vehicles. Samsung SDI is the official strategic partner of BMW, and other core customers include Volkswagen, Chrysler, Mahindra, Lucid Motors, etc. The main supporting models include BMW's Megacity, i3 (EV), i8 (PHEV), X5, 330e, etc., as well as Fiat (Fiat500EV), BMW XT, BMW XT and BMW XT.

Important models such as Cayenne S, Audi (e-tron), and Mercedes-Benz (S-Class).

In order to reduce costs and maintain competitiveness, Samsung SDI actively cooperates with high-quality raw material suppliers, mainly in China, Japan and South Korea. The main positive electrode suppliers include Posco, Umicore, etc., the main negative electrode suppliers include BYD, Hitachi Chemical, etc., the main diaphragm suppliers include Asahi Kasei, Toray, Shanghai Enjie, etc., and the main electrolyte suppliers include Xinzhoubang, Mitsubishi Chemical, Cathay Huarong, etc.

Samsung SDI has set up factories for automotive power batteries in South Korea, China, the United States, Hungary and Austria. According to Samsung SDI's announcement, in 2017, the sales revenue of power battery companies in South Korea, China, the United States and Europe totaled 638.5 billion won (about 4 billion yuan), and the net profit totaled -65.26 billion yuan (about -400 million yuan).

Currently, the energy density of Samsung SDI's third-generation power battery is 550wh/L, and it has been mass-produced. According to Samsung SDI's plan, the energy density of the 3.5th-generation battery product, which is expected to be mass-produced in 2019, can reach 630wh/L. At the same time, Samsung SDI is also accelerating the research and development of the fourth-generation battery and the fifth-generation battery, with energy densities of 700wh/L (equivalent to 270-280wh/kg) and 800wh/L (equivalent to 300wh/kg), respectively, and is expected to be mass-produced around 2021-2022 and after 2023, respectively.

Samsung SDI's 2Q19 revenue was 2.4 trillion won, up 7% year-on-year, of which the battery business increased by 5.4% year-on-year. Samsung SDI recently announced its 2Q19 results, with total revenue of 2.4 trillion won, up 7% year-on-year, and operating profit of 157.3 billion won, up 2.9% year-on-year. Among them, lithium battery revenue was 1.8 trillion won, up 5.4% year-on-year. In the lithium battery segment, small lithium battery revenue was about 1.29 trillion won, up 18.3% year-on-year, and large lithium battery (energy storage and power battery) revenue was about 531.4 billion won, down 16.6% year-on-year.

The growth rate of small lithium batteries has slowed down, and power and energy storage batteries continued to decline year-on-year. The company's small lithium battery revenue accounted for 71% of the total lithium battery business revenue in 2Q19, which was basically the same as 1Q19, and both were at a high level since 3Q17. The growth of the company's lithium battery business was mainly driven by small lithium batteries. On the one hand, the demand for large lithium batteries has not fully recovered due to the impact of the fire in South Korea, and on the other hand, the power performance is relatively general. In 2Q19, the revenue of small and large lithium batteries increased by 5.4% and -16.6% respectively.

► Small lithium battery: The main downstream demand for ternary cylindrical batteries is electric tools, electric balance bikes and electric bicycles. In 1H19, the performance of electric tools was average, but the demand for lithium batteries for balance bikes and bicycles increased. The main downstream demand for ternary soft packs is mobile phones and wearable devices, benefiting from the growth in demand for lithium batteries for low-priced mobile phones. However, the overall growth rate fell significantly month-on-month.

►Power battery: The quarterly installed capacity has improved month-on-month, but we expect a small year-on-year growth, mainly because the company's power batteries are mainly used for plug-in hybrid models, and the expansion of new pure electric customers and models is slow. In addition, the company believes that the main direction in the Chinese market is to increase the capacity utilization rate of the Xi'an and Tianjin factories, rather than to deploy new capacity.

►Energy storage batteries: South Korea's local energy storage demand improved slightly month-on-month, while the demand on the US grid side also increased, but it was also weak year-on-year. The company expects that in 2H19, South Korea's local energy storage will benefit from the gradual elimination of the impact of the fire storm, and demand will pick up significantly, driving energy storage batteries to perform better than in the first half of the year. At the same time, the company expects the compound growth rate of global energy storage demand to reach 30-40%, and to increase the proportion of overseas energy storage shipments to 80-90% in the medium and long term.

The operating profit margin and net profit margin rebounded on a quarter-on-quarter basis. In 2Q19, the company's operating profit margin increased by 1.3ppt on a quarter-on-quarter basis, and the net profit margin increased by 4ppt on a quarter-on-quarter basis. We believe that the impact of the Korean energy storage fire incident on profits is gradually being absorbed.

2.SKI Battery (SKInnovation)

SK Innovation is South Korea's first large-scale energy and chemical company, with business scope including oil development and other businesses, petroleum business, chemical business and lubricant business. In 2017, SKI's sales revenue was 462,609 billion won, a year-on-year increase of 17.06%, and operating profit was 32,344 billion won, a year-on-year increase of 0.19%; among them, the sales revenue of E&P and Other Business/Petroleum Business/Chemical Business/Lubricant Business accounted for 2%/71%/20%/7% respectively, and the operating profit accounted for -5%/46%/43%/16% respectively. The power battery business belongs to the E&P and Other Business segment.

SKI was founded in 1962. Its predecessor was Korea Oil, the first oil refining company in South Korea. After more than 50 years of development, the company has grown into the most representative international energy and chemical company in South Korea. In 2005, SKI began to develop lithium-ion batteries for automobiles and put them into production in 2006. In 2010, it became the designated supplier of South Korea's first pure electric vehicle BlueOn and Kia Ray. In 2013, it established BESK in a joint venture with Beijing Electric Control and BAIC Group (discontinued in 2017).

SKI's products have covered electrodes, diaphragms, battery packs, battery packs, etc., and it has rich experience in the production of soft-pack batteries. SKI has leading lithium battery diaphragm technology. It is the world's first company to launch a 5μm diaphragm and the world's first company to commercialize ceramic coated diaphragms. As of February 2018, the company has 11 diaphragm production lines; it plans to add two new lines by the end of 2019, bringing the production capacity to 500 million square meters per year. In addition, the company has also built third-generation and fourth-generation coated diaphragm production lines. In addition, by utilizing the continuous curing patent, the company has certain quality and cost advantages in the flexible copper clad laminate industry.

SKI has established four power battery factories in South Korea, Hungary and China. Currently, only the South Korean factory is mass-producing power batteries, while the Hungarian and Chinese factories are under construction. According to SKI's announcement, the sales of the battery manufacturing factory in South Korea in 2017 were 25 billion won (equivalent to about 153 million yuan).

According to SNE data, SKI's power battery shipments were 207.3Mwh in 2016 and 295.8Mwh in 2017, with a growth rate of 42.7% in 2017.

SKI actively promotes the research and development and production of electric vehicle battery systems. It has become a battery supplier for multinational automobile companies such as Mitsubishi Fuso, Mercedes-Benz, and Hyundai Kia Group under the German Daimler Group, and has established joint ventures with China's Beijing Electric Control and BAIC Group.