Power battery exports are going all the way up. According to data from the China Power Battery Industry Innovation Alliance, in the first 10 months of this year, China's power battery exports totaled 1012GWh, accounting for 875%, a cumulative year-on-year increase of 1054%。
Zhang Yongwei, vice chairman and secretary general of the China Electric Vehicle 100 Association, believes that 2023 will be a year for China's new energy vehicle exports and industrial chain to go overseas.
But, like two sides of the same coin, there are always opportunities and challenges. Some industry insiders reminded that although China's power battery has a good momentum to go to sea, in the long run, it is not easy to "take root" in overseas countries such as Europe, and geopolitics, cultural differences, policies and regulations, high costs and other issues are challenges that enterprises need to face.
Power battery companies have enough momentum to go overseas
In the past two years, China's power battery companies have made frequent moves to go overseas. In February this year, CATL announced that it would cooperate with Ford to build a new power battery plant in Michigan, USA, to produce lithium iron phosphate batteries. The joint venture battery plant will use CATL's lithium iron phosphate CTP technology, with an initial production capacity of 35GWh and an investment of up to US$3.5 billion, with a planned start of production in 2026.
Not long ago, CATL reached a CTP cooperation agreement with Thailand's Arun Plus***, and the two parties will be committed to meeting the local demand for electric vehicle production and helping Thailand become a battery production center in Southeast Asia.
In addition to CATL, the pace of other power battery companies going overseas is also accelerating: in February this year, Gotion Hi-Tech announced that its wholly-owned subsidiary, Hefei Gotion Hi-Tech Power Energy, signed a memorandum of understanding with European battery manufacturer Inobat. Under the agreement, the two parties will leverage their respective technological strengths, complementary capabilities, and shared sustainability concepts to explore cooperation opportunities. In May, EVE announced that the company's wholly-owned grandson company, EVE POWER HUNGARY KORLATOLT FELELOSSEGU TARSASAG, had signed a land purchase agreement with the seller to purchase the seller's land in the northwest industrial zone of Debrecen, Hungary, for the production of cylindrical power batteries. According to the plan, EVE's Hungarian plant will be completed and put into operation in 2026 as planned, and the large cylindrical batteries produced will be supplied to BMW's Debrecen plant. In July, Sunwoda announced that the company's subsidiary, Sunwoda Power, through its subsidiary Sunwoda Hungary, invested in the construction of the first phase of the new energy vehicle power battery factory in Hungary with its own and self-raised funds, with an investment amount of no more than 19600 million yuan....
Why do Chinese power battery companies choose to go to sea? According to the analysis of industry insiders, digestion capacity is an important reason. According to the statistics of the China Automotive Power Battery Industry Innovation Alliance, by the end of 2022, China's power battery production capacity will be 1260GWh. As of the end of June 2023, China's power battery production capacity is 1,860GWh. In 2022, China's power battery capacity utilization rate will be 516%, with the possibility of falling to 41% in 2023. Going overseas has become an important "problem-solving idea" for battery companies to digest production capacity.
On the other hand, there is still huge room for development in overseas markets. Taking Europe as an example, SNE Research**, a South Korean battery market research agency, in 2023, the demand for electric vehicle batteries in Europe will reach 406GWh, and the ** volume is expected to be 335GWh, a gap of nearly a quarter.
Li Jin, Chairman of Gotion Hi-Tech, said, "The process of global vehicle electrification is moving forward. The future share of the new energy vehicle market in the United States, South Asia, Europe, and China will be about the same, and if we want to make a difference, the three markets outside China cannot be lost. ”
Facing challenges such as policies and regulations, labor costs, etc
Although the momentum of China's power battery companies going overseas has not decreased, there are also many challenges in the process of going overseas. One of them is the legal and policy risks of overseas markets.
For example, in August last year, the United States issued the "Inflation Reduction Act", which sets strict standards for critical minerals and components in automotive batteries. In August this year, the EU Battery and Waste Battery Regulation (hereinafter referred to as the "New Battery Law") came into force. The regulation imposes requirements on battery carbon footprint claims and labels, batteries*** and digital passports.
According to Shi Hong, deputy director of the green and low-carbon department of the China Automotive Strategy and Policy Research Center, since the beginning of this year, the EU has successively issued and implemented a ban on the sale of fuel vehicles, a "carbon tariff" and a "new battery law", which will protect the local industrial chain while forcing the electrification of European automotive products.
According to industry experts, the starting point of these policies may not be carbon reduction, but the setting of "green barriers".
Yu Qingjiao, Secretary-General of Zhongguancun New Battery Technology Innovation Alliance and Chairman of the Battery 100 Association, said that the implementation of the EU's "New Battery Law" will have a far-reaching impact not only on China's power battery industry, but also on the global power battery industry chain. In the short term, products sold to the EU will inevitably lead to higher costs for companies to meet stricter requirements in terms of carbon footprint, battery passports, batteries**, etc. In the long run, it will also give rise to a new round of deep "reshuffle" in the industry.
In addition to policies and regulations, labor costs and cultural differences are also challenges that cannot be ignored by Chinese battery companies. Liu Jincheng, chairman of Huizhou EVE Lithium Energy Co., Ltd., said, "The cost of building a factory in Europe will be several times higher than that in China. Moreover, different countries have different customs, and how to integrate with the local culture is also a big problem. ”
Wang Zhikun, executive vice president of Honeycomb Energy Technology Co., Ltd., also feels the same way. He said that in the process of globalization, Chinese battery companies will face differences in culture, environment and behavior. In the case of the European market, for example, the cultural differences include the fast and slow pace of work between China and Europe; Environmental differences refer to the differences between China and Europe in terms of approval, and Europe is more complex in terms of land and environment. Behavioral differences refer to the fact that design, factory construction, and general contracting can be flexibly paralleled in China, while Europe pursues standardization and must be adopted one by one in order.
Enterprises going out should be legal and compliant, respect each other's Xi culture, ** chain should be warm together, more communication. Wang Zhikun said.
It is necessary to further improve the competitiveness of batteries
In the future competition, how can Chinese power battery companies improve their global competitiveness? Miao Wei, member of the Standing Committee of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and vice chairman of the Economic Committee, suggested that competitiveness should be improved by reducing costs and increasing efficiency. Power batteries account for nearly 40% of the cost of the whole vehicle, and power batteries still need to further reduce costs in the future. Industry experts generally expect that the cost of a power battery of $100 kWh is the tipping point for the cost of electric vehicles and fuel vehicles. Only when the cost of the power battery is reduced to $100 kWh without the ** subsidy can electric vehicles truly compete with fuel vehicles. With the gradual maturity of power battery raw materials, design and structural technology, especially the head power battery enterprises to achieve cost reduction and efficiency increase through economies of scale, it will further enhance the international competitiveness of Chinese power battery enterprises.
At the same time, adhere to innovation-driven and do a good job in the next generation of battery technology reserves. In order to achieve high energy density, high safety, fast charging, long life and other requirements, technological innovation is the core and the key. In terms of system structure innovation, CTP, CTC, JTM, CTB and other structural innovation technologies are adopted to achieve better integration of batteries and vehicles. In terms of material system innovation, solid-state batteries have high safety and high energy density, which is the focus of competition for next-generation battery technology. At the same time, we should also pay attention to the R&D and industrial application of new material system batteries such as lithium iron phosphate batteries, lithium iron manganese phosphate cathodes, high nickel cathodes, lithium-rich manganese cathodes, and silicon-carbon anodes.
In addition, it is necessary to strengthen the supply and price stabilization of upstream materials for batteries. According to the data released by the United States Geological Survey in 2021, China's lithium ore reserves rank sixth in the world. However, China's salt lake lithium has great development potential, especially the process of extracting lithium carbonate from salt lake brine with high magnesium-lithium ratio has great potential. This process technology has matured, and its cost is about 50,000 yuan per ton. Therefore, we should integrate resources and increase the process of process technology research and development and industrialization, so as to form production capacity as soon as possible. At the same time, it is also necessary to implement the extended producer responsibility system and strengthen the use of automotive power batteries and cascades, which is not only a requirement for environmental protection, but also a measure to "ensure supply" of resources, and it is also the advantage of our country.
Dong Yang, chairman of the China Automotive Power Battery Industry Innovation Alliance, said that China's power battery industry, as the world's leading industry, must make its own planning, use industrial planning to guide actions, and use industrial planning to influence decision-making. "Now China's power battery has become a trillion-level industry, there are many problems, the ecology has not been fully formed, and it is also evolving from the policy of the small industry to the policy of the large industry, the industry can do a lot, still need to keep in mind the original intention, do not forget the mission. ”