After the collapse of lithium carbonate, electric cars will only be crazier than oil cars

As an industrial product, electric vehicles must become increasingly cheaper.

Rather than saying that the expensive problem of electric vehicles was cured by Tesla , it is better to call it a self-correction of China's new energy vehicle market.

In early 2023, fueled by Tesla, the car price war intensified. Wenjie and Xiaopeng followed closely; Guangzhou Automobile and BYD immediately joined the battlefield; to this day, Citroen, which dropped RMB 90,000 in Wuhan, has made a strong move to enter the market with fuel vehicles.

Not crazy, not live. For car companies that value long-termism, the competition for market share at this moment is far more important than immediate profits. But on the other hand, how to be as price competitive as possible is an extremely headache.

Reduce allocation and price? Increase the guaranteed price? When most car companies are involved in price manipulation, if anyone does nothing, it is tantamount to "offending public anger."

To take a step back, there are actually many ways for car companies to fight price wars, and various promotional policies emerge one after another, which will inevitably clear up a lot of inventory cars. But it must be clear that a price war is not the purpose. How to win the favor of more consumers is the fundamental focus of this battle.

The good news is that with the decline in lithium carbonate prices, new energy vehicle companies have a decent reason to cut prices, and their brand image can be preserved. From a longer-term perspective, can the ensuing chain reactions, changes in the market structure, etc. really end well?

01

The decline of lithium carbonate is a foregone conclusion

"The price of lithium carbonate will be significantly reduced anyway because demand is far less than expected."

On March 2, Li Xiang announced on Weibo that the number of passenger vehicle insurances in January and February fell by more than 25% year-on-year, of which new energy passenger vehicles accounted for more than 30%. In other words, under the influence of the general environment, the situation of new energy vehicles is not good.

Consumers are addicted to "wait and see", demand for new energy vehicles continues to shrink, and negative sentiments move up the supply chain. Power battery companies, upstream raw material suppliers, etc. will all be affected.

Three feet of ice does not freeze in one day.

In fact, it is not just short-term changes in market supply and demand that have led to the continued decline in lithium carbonate prices. There are many different influencing factors. For example, the " lithium ore rebate" plan of the Ningde era has acted as a "fuse".

According to 36Kr, CATL is actively promoting a lithium ore rebate plan to car companies. This plan is not open to all customers, but is only open to a few strategic partners such as Ideal, Weilai, Huawei, and Jikrypton.

Specifically, the core terms of the lithium mine rebate plan are: in the next three years, the price of lithium carbonate for some power batteries will be settled at 200,000/ton, but the car companies that sign this cooperation need to purchase about 80% of the batteries. Commitment to CATL.

CATL, which has been struggling in the power battery industry for many years, seems to have judged the unilateral decline in lithium carbonate prices earlier. At this time, the operation of pulling out the fuel from under the cauldron has spread the price war to the entire power battery industry chain on the premise of further binding the car companies.

Of course, fueling the flames is also the stimulation of various anecdotal news.

News about sodium-ion batteries comes out frequently, especially the unveiling of mass-produced models jointly produced by Zhongke Hainan and Jianghuai Automobile, which has played a big role in swaying the mountain and shaking the tiger. Coupled with the increasingly mature power battery recycling technology, the rediscovery of lithium mineral resources, and the overcapacity of power battery companies, these have become the straw that breaks the camel's back.

Not to mention, the national level is also taking action. As a result, there is only one way left for the upstream raw materials of power batteries such as lithium carbonate - to return to the value itself.

Regarding the price law, economics defines it this way: within a certain or specific period of time, the price fluctuations displayed by a certain commodity or a certain type of commodity are determined by the value of the commodity, and fluctuate around the value affected by market supply and demand.

The rising penetration rate of new energy vehicles has not only stimulated the price of lithium carbonate, but also made its price far exceed its own value. Therefore, the current price changes, in addition to the impact of market supply and demand, are also a manifestation of price laws.

As for whether it will cause a " stampede " in the capital market, we can only hope for the best.

02

How much will the vehicle cost drop?

Ouyang Minggao, an academician of the Chinese Academy of Sciences, once said that lithium prices will return to a rational level of 350,000 to 400,000/ton in the second half of this year, and the more reasonable price balance point in the future may be around 200,000/ton.

This coincides with CATL ’s “ lithium ore rebate” plan, and the price of 200,000/ton seems to be the final destination of lithium carbonate prices.

So, as the price of lithium carbonate drops, how much can the cost of the vehicle be reduced?

First of all, it must be made clear that lithium carbonate is one of the cathode materials for power batteries . According to the different ratios of lithium iron phosphate batteries and ternary lithium batteries , their dosage is also different, and the cost ratio is naturally different.

Coupled with module packaging, Pack integration, labor costs, etc., it is very difficult to quantitatively calculate the cost changes of power batteries based solely on the price fluctuations of lithium carbonate .

However, we can roughly estimate that at the end of the first quarter of 2022, when the prices of various raw materials have risen to a high point, the cost of ternary batteries will be 950 yuan/Kwh, and the cost of lithium iron phosphate batteries will be 800 yuan/Kwh. Calculated based on the average bicycle battery pack of 70 kilowatt-hours, it is equivalent to 66,500 yuan for a three-element bicycle battery and 56,000 yuan for a lithium iron phosphate battery .

Considering all factors, lithium carbonate accounts for about 10% to 15% of the total cost of power batteries.

So when its price drops from 600,000 yuan/ton to 200,000 yuan/ton, it means that the cost of ternary battery bicycles will drop by 2,216 to 3,325 yuan, and the cost of lithium iron phosphate battery

Judging from the calculation results, the impact of lithium carbonate on the cost of the entire vehicle does not seem to be as large as imagined. But don’t ignore that lithium carbonate is not “fighting” alone.

Relevant data shows that driven by the decline in lithium carbonate prices, positive electrode materials, negative electrode materials, electrolyte and other links have experienced price reductions to varying degrees. The combination of so many factors will inevitably lead to considerable cost reductions.

Obviously, the falling prices of upstream raw materials such as lithium carbonate are an inevitable outcome of the price war for new energy vehicles and a key factor in maintaining the balance of the automotive market.

After all, the arrow is on the line, and the fierce battle for market share in the new energy vehicle market is inevitable. What is certain is that in this bloody battle, power batteries cannot become the shortcomings of various car companies. They will at least be brought back to the same level, allowing more new energy car companies to have a fighting chance. force.

03

Power batteries are no longer an obstacle

Last year or even earlier, the argument that "battery manufacturers kidnapped car companies" could always be heard in the market, with CATL being the most controversial. GAC Chairman Zeng Qinghong’s cry - “Work for CATL” has completely intensified the conflict between power battery companies and car companies.

In a short period of time, major car companies have responded, either setting up their own battery factories, or actively looking for secondary and tertiary supplies. GAC, NIO, Xiaopeng, etc., like the revolutionary vanguard, have launched charges again and again towards the inherent power battery market structure.

Looking at it now, these actions have begun to bear fruit.

The shopping mall is like a battlefield, and the game is always played inadvertently.

Behind these actions of car companies, rather than wanting to develop and manufacture their own power batteries, it is better to interpret them as carving up the right to speak in the power battery industry. Because only in this way can the return of cash be promoted faster, so that car companies can relax their hands and have more confidence and enthusiasm in market competition.

On the other hand, after such a series of sales by car companies, Ningde Times will certainly have concerns, and power battery companies such as China Innovation Aviation and Guoxuan Hi-Tech will also be panicked. Only in this way can the industry chain be in awe of the market and better promote the development of the new energy vehicle market.

And the most important point is that with the efforts of all parties, the prices of upstream raw materials are finally moving in a healthy direction, and the power battery market will gradually return to normal.

There is no doubt that in today's market environment, the development of new energy vehicles has become an important support for domestic economic recovery. Against this backdrop, the high cost of power batteries will not be allowed to continue to act as a stumbling block to incremental market development.

After the power battery problem is solved, new energy vehicles will officially enter the "hand-to-hand combat" stage. After all, if you kill one thousand enemies, you will suffer eight hundred losses. If it is not necessary, no car company is willing to join the price war. But again, the general trend of the times is like this, and the market also needs such a battle of blood and fire to distinguish who is a good coin and who is a bad coin.