Crossing the river by touching BYD, is it feasible for GAC Aian to develop self-developed power batteries?

New energy vehicle companies have been struggling with power batteries for a long time!

Since Zeng Qinghong, chairman of GAC Group , publicly mocked himself as a "worker" in the CATL era at the "2022 World Power Battery Conference" , it has completely fired the first shot for new energy vehicle companies to regain dominance.

From announcing the establishment of Inpai Battery to breaking ground, GAC Aian took less than two months. On December 11, the Yinpai Battery located in the GAC Zhilian New Energy Vehicle Industrial Park officially started construction. This is the foothold of GAC Aian's self-developed power batteries.

According to the plan, Inpai Battery's factory is expected to be delivered in October 2023, and the introduction of the 36GWh production line will be completed by the end of 2025, which will be able to meet the loading needs of 600,000 new energy vehicles.

In fact, GAC Aian’s self-developed power batteries have already been traced.

At the "GAC Technology Day" held in April 2021, GAC Group disclosed the "Neutron Star Strategy". This strategy mainly focuses on the innovative technology of power batteries. The construction of a self-developed power battery trial production line is an important part of it. .

In August 2022, GAC Group issued two consecutive announcements. One is that it will establish a power battery company to carry out the industrialization of independent research and development of power batteries; the other is that it agrees to participate in the project of building a power battery production base by Guangzhou Juwan Technology Research.

In October 2022, GAC Aian announced the registration of Yinpai Battery, which means that GAC Aian has basically completed the closed loop of the new energy vehicle industry chain.

Just like in the era of fuel vehicles, traditional car companies self-developed engines and other core components, it has become a trend for new energy car companies to self-develop power batteries. Not only GAC Aion, but also Tesla , NIO, Great Wall Motors, Geely Group, BYD , etc. have entered the field of power batteries through self-research.

Tianfeng Securities pointed out in the research report that the benefits of new energy vehicle companies' self-developed power batteries are obvious, including that power battery technology has become mature, and new energy vehicle companies have late-mover advantages; with the backing of new energy vehicle companies, power battery shipments have grown Fast and stable; new energy car companies have a deeper understanding of vehicles, and vehicle-end needs can directly penetrate into power batteries and so on.

Self-developed batteries look promising, but is it feasible for GAC Aian to develop self-developed power batteries? At this stage of extremely fierce competition in the new energy vehicle market, can GAC Aion catch up with its peers if it allocates its energy to self-developed batteries? Can it turn from a "worker" in the Ningde era to become a master?

1. Is it imperative?

Power batteries are the core components of new energy vehicles and are also likened to the "heart" of new energy vehicles. Its cost accounts for almost 40%-50% of the total vehicle cost. In other words, whether new energy vehicle companies can achieve profitability has a huge relationship with power batteries.

Cao Tao, a person in the new energy vehicle industry chain, told "Tanke Travel": "If new energy vehicle companies want to achieve profitability, they must have excellent management and control capabilities in the industry chain, especially the power battery link, which must be mastered. In our own hands, we can firstly expand profit margins; secondly, we can maintain stable supply; and thirdly, we can avoid being 'stuck' by upstream."

Among them, maintaining stable supply and avoiding "stuck" can be alleviated through "second supply" and "third supply", but expanding profit margins can only be achieved through self-developed power batteries.

Taking BYD and its self-developed blade batteries as an example, CITIC Securities once pointed out that the average cost of BYD's new energy passenger car battery packs in 2019 was 0.85 yuan/Wh. After replacing them with blade batteries, the cost is expected to drop by 30% to 0.6 yuan/Wh. Assuming that the battery capacity of a BYD new energy passenger car is 50kWh, the cost of a single vehicle battery will drop by about 12,500 yuan.

"Since the advent of blade batteries, there have been several 'scandals' with Tesla. According to industry estimates, with the same cruising range , Tesla's installation of blade batteries will reduce the cost of power batteries by about 30%, thus Gain greater profit margins," Cao Tao said.

Although expanding profit margins is very attractive for new energy vehicle companies, self-developed power batteries are not a necessary option. However, at this stage, the reasons for new energy vehicles to develop self-developed power batteries have become more and more sufficient.

The soaring prices of power battery raw materials have become a nightmare for almost all new energy vehicle companies.

Before 2021, no power battery raw material can be called "petroleum", but after 2021, the "worth" of lithium salts such as battery-grade lithium carbonate and battery-grade lithium hydroxide has skyrocketed. The time surged tenfold, and the price increase was difficult to obtain, making it a veritable “white oil.”

Taking battery-grade lithium carbonate as an example, according to data tested by Business Society, as of December 17, the price of battery-grade lithium carbonate was 610,000 yuan/ton. For comparison, in December 2021 and June 2022, the price of battery-grade lithium carbonate was 610,000 yuan/ton. The prices of lithium are 205,000 yuan/ton and 472,000 yuan/ton respectively.

The price of raw materials has soared, directly increasing the cost of power batteries.

At the "12th China Automobile Forum", Changan Automobile Chairman Zhu Huarong said bluntly, "(The rise in power battery costs) has led to an increase in the cost of Changan Automobile's bicycles by 5,000 yuan to 35,000 yuan. These costs are all absorbed by our company itself. It seriously affects the achievement of product benefits and causes huge fluctuations in business operations.”

GAC Aian also felt the cold. The continued soaring raw material prices made it set its sights on the upstream lithium mines . For example, it signed a strategic cooperation agreement with Ganfeng Lithium Industry to develop lithium resources, lithium salt deep processing and batteries. We carried out in-depth cooperation on comprehensive recycling and other aspects, and later obtained exploration and mining rights for mineral resources with the help of a joint venture established by GAC Parts, a subsidiary of GAC Group, Shixi Coal and Zunyi Energy.

Behind the self-development of power batteries by new energy vehicle companies, there are also conflicts and anxiety caused by the imbalance between power battery supply and demand.

Zeng Qinghong said at the "2022 World Power Battery Conference" that "the power battery market is facing an imbalance between supply and demand." He Xiaopeng, chairman and CEO of Xpeng Motors, also bluntly said that "the tight supply of power batteries will still cause Chinese car companies to face huge challenges this year." .

According to calculations by SNE Research, an energy market research organization, by 2025, the gap between power battery production and sales will reach 37%, and the gap in vehicle loading will reach 25%, and supply and demand will continue to remain tight.

"Before the production lines of several leading power battery companies have been completed, they have already encountered early 'order lock-in' by new energy vehicle companies. Moreover, most power battery companies' orders for the first half of next year have already been fully booked. At this stage, high-quality production capacity After all, it is limited, which is why new energy vehicle companies have to develop their own power batteries," Cao Tao revealed to "Tanke Travel".

In addition, power batteries are related to the safety, performance and driving experience of new energy vehicle products, and directly affect the delivery of new energy vehicle products and consumer decisions. If power batteries are always left to power battery companies, it is tantamount to Will be controlled by others.

It can be seen that it is imperative for car companies to develop their own batteries.

2. The road is difficult and long

From an objective perspective, BYD has played a demonstration role for new energy vehicle companies, which to a certain extent proves the feasibility of new energy vehicle companies' self-developed power batteries .

On December 9, the China Automotive Power Battery Industry Innovation Alliance announced data on power battery installations in November 2022. Among them, BYD's installed capacity was 8.94GWh, a year-on-year increase of 158.38%, accounting for 26.09% of the market. The market share ranks second, second only to CATL .

It is worth mentioning that BYD is not only a "resident guest" at the seat of China's second largest power battery company, but has also ranked among the top four in the world for five consecutive years.

At this stage, most of the power batteries produced by BYD are used in its own models. In other words, BYD alone, a new energy vehicle company, can account for nearly 30% of the power battery installed in the Chinese market.

Today, BYD has an increasing number of "followers", such as Great Wall Motors and Honeycomb Energy, GAC Aian and Inpai Battery. However, it is certain that GAC Aian's road to self-developed power batteries will most likely not be as smooth as BYD's.

First of all, China's power battery market has basically formed a competitive pattern of "one tyrant, one super, many strong". The belated arrival of GAC Aian has been difficult to shake the status of various power battery companies, and the room for its development is extremely limited. .