Looking at the future market structure of ternary batteries from the perspective of the insured passenger car market in 2020

Data from the Power Battery Application Branch shows that the number of insured new energy passenger vehicles in China in 2020 was 1.1219 million, of which 919,300 were equipped with ternary batteries, accounting for 81.94%. The mainstream position of ternary batteries in the passenger car market has not changed. 

01

Ternary batteries are still the absolute mainstream in the passenger car market

 In the previous article, we analyzed the insurance situation of lithium iron phosphate-related passenger car models in 2020. Comparing the insurance situation of ternary passenger cars, it can be seen that the position of ternary batteries in the passenger car market has not been shaken. Among the top 10 models of lithium iron phosphate passenger cars insured in 2020, only 6 models had an insurance volume of more than 10,000 vehicles, and the Roewe eRX5 ranked 10th had an insurance volume of only 3,275 vehicles in 2020; on the other hand, the Xiaopeng G3, which ranked 20th, had an insurance volume of 11,982 vehicles, and 22 models had an insurance volume of more than 10,000 vehicles throughout the year. Judging from the number of models insured with ternary and lithium iron phosphate batteries, there were 292 models of insured passenger cars equipped with ternary batteries in 2020, while there were only 59 models with lithium iron phosphate batteries. It is worth noting that even for the matching ternary batteries themselves, the gap in the insurance volume of each model is very obvious. Among them, the number of insured Tesla Model 3 ranked first reached 112,800; the number of insured Aion.S ranked second was 52,600, more than half less than the number of the first; the number of insured cars ranked 3rd to 6th was between 30,000 and 50,000. Another interesting phenomenon is that among the TOP20 models insured, the distribution of car companies is also relatively scattered. Only BYD has multiple models in the TOP20, while the others mainly have one or two models in the list. 

02

The market structure of ternary batteries will change significantly in 2020

Thanks to the boost from the hot-selling passenger car models, the market structure of ternary batteries in my country has also undergone significant changes in 2020. For example, LG Energy Solution ranked second in the Chinese market in terms of installed capacity by supporting the Model 3/Y produced by Tesla (Shanghai) Factory; AVIC Lithium Battery supported GAC Aion.S and successfully squeezed into the top four; Phylion Power Supply was associated with the new national magic car Hongguang MINI EV, and the insured capacity of its ternary batteries also increased significantly, advancing to the top ten. 

According to Battery China, the total amount of electricity carried by ternary batteries in insured passenger cars in 2020 was about 39.14GWh, and a total of 54 battery companies provided supporting services. Among them, CATL ranked first with an insured electricity carrying capacity of 17.80GWh; LG Energy Technology ranked second with an insured electricity carrying capacity of 6.41GWh. The third to tenth places were BYD, AVIC Lithium Battery, Farasis Energy, Lishen Battery, Star Power, Jiewei Power, Honeycomb Energy and Tafel. In terms of the number of supporting models, among the top 10 battery companies with insured electricity carrying capacity, CATL provided power batteries for a total of 118 insured passenger car models in 2020, including 40 models of Lishen Battery, 19 models of BYD, 18 models of AVIC Lithium Battery, 15 models of Farasis Energy, 12 models of Jiewei Power, 11 models of Tafel, 6 models of LG Energy, and 4 models each of Honeycomb Energy and Star Power. Although LG New Energy and Xingheng Power Supply have relatively few supporting models, they still rank well in the ranking of the power of ternary batteries for insured passenger cars because they are all supporting hot-selling models. For example, LG New Energy mainly supports Tesla (Shanghai) Factory Model 3, General Motors Buick and other models, but the number of Tesla Model 3 insured reached 112,812, and the ternary batteries were mainly provided by LG New Energy; SAIC-GM-Wuling Hongguang MINI EV, the number of ternary battery models insured was 48,450, and the batteries were all provided by Xingheng Power Supply. It is worth noting that although BYD has been pushing its lithium iron phosphate blade battery in 2020, from the perspective of its supporting batteries for insured passenger cars in 2020, ternary batteries are still the main ones, and the proportion of insured models with ternary batteries has reached 74.63%. Its hot-selling models such as BYD Qin, BYD e2, BYD Tang, BYD Song, BYD Yuan and other models are still mainly ternary batteries. However, this situation will change in 2021. BYD has already declared a lithium iron phosphate version of the above-mentioned best-selling models, and will mainly supply lithium iron phosphate in the future. 

03

The passenger car market in 2021 will still face certain uncertainties

Judging from the trend in 2021, the position of CATL's ternary battery in the passenger car market should still be unshakable by any company. In addition to supplying Chinese automakers, CATL will also provide ternary batteries for Sino-foreign joint ventures and wholly foreign-owned automakers. It is expected that the supply of CATL's ternary batteries will continue to grow rapidly in 2021. LG Energy Solution still has the opportunity to maintain its second place. In 2020, LG Energy Solution has squeezed into the top 2 in terms of the amount of electricity carried by insured passenger cars with ternary batteries, mainly relying on the drive of the Tesla (Shanghai) factory. From the current suppliers of ternary models of the Tesla (Shanghai) factory, LG Energy Solution is still the only one. In addition to the hot-selling long-range Model 3, in 2021, LG Energy Solution will also provide ternary batteries for the Model Y models mass-produced by the Tesla (Shanghai) factory. The planned production capacity of the Tesla (Shanghai) factory this year is 550,000 vehicles. Assuming that 200,000 vehicles (Fe-lithium version Model 3) are deducted, there are still about 350,000 models that will be equipped with ternary batteries, and the demand for ternary batteries is expected to exceed 20GWh. At the same time, because BYD has gradually switched its models to lithium iron phosphate batteries, there are not many battery companies that can temporarily threaten LG New Energy's ranking. Similarly, AVIC Lithium Battery's ranking in the passenger car field in 2020 has risen very rapidly, and the installed capacity of ternary batteries for insured passenger cars has stabilized in fourth place. It is expected that in 2021, relying on its deep binding with customers such as GAC and Changan, and expanding new first-tier customers such as Geely, AVIC Lithium Battery's ternary batteries are expected to continue to have a very impressive performance in the passenger car market in 2021. It is worth noting that there are still many uncertainties in the passenger car ternary battery market in 2021, and "dark horses" are expected to continue to appear frequently. Just as Xingheng Power successfully squeezed into the top ten by supporting Hongguang MINI EV, there are still many battery companies that may significantly increase their installed capacity by supporting new models. In addition, some battery companies have been working hard for many years in terms of production capacity, market, customers, channels and brands. It is expected that in 2021, there will be a double explosion in production capacity and market, which will have a great impact on the existing rankings. Among them, EVE Energy, Farasis Energy, and Honeycomb Energy are most likely to be the winners. We might as well wait and see.