Car companies are reluctant to work anymore, and Ningwang has lost 400 billion

Text|New Media Technology Review.

For example, CATL, the former king of the new energy track, has exceeded 40% from the high point of the year, and the cumulative decline since the beginning of the year has reached 27%, as of December 25, it is the second largest evaporation of market value this year.

Taking the time dimension a little longer, CATL's current market value has fallen close to one trillion yuan from the highest point in 2021, and about 400 billion yuan has evaporated in the past four months.

What's worse is that the net profit of CATL in the third quarter has declined for the first time since its listing, and the performance growth rate is no longer there

1. King Ning is still making moneyJudging from the third quarter report of CATL, its earning ability is not bad, and the first three quarters of this year almost earned the profits of last year, and the company's revenue and net profit in the first three quarters of this year increased by 40 percent year-on-year10% and 7705%。

But despite this, the capital market did not buy it, CATL's share price began before the release of the third quarterly report, and the decline has continued to this day, behind the "double kill" of stock price and performance, perhaps because CATL's "imagination space" is getting smaller.

In February this year, Ford Motor officially announced that it would reach a cooperation with CATL to build an electric vehicle battery plant in Michigan, USA, which is also seen as a major positive for CATL to go overseas and actively expand the second growth curve.

However, due to the impact of the U.S. battery bill, CATL's plan to build a factory was suspended for a time, and although it has now announced its restart, the factory's production capacity has been cut by nearly 40%, and it is still unknown whether it can be put into operation in 2026 as scheduled.

For CATL, the blockage of the factory construction plan is only one of the hurdles for its entry into overseas markets, and as a leading enterprise in the global power battery market, CATL has long been targeted by all walks of life.

In early December, Duke Energy, a U.S. utility, said it would cut off the company's connection to CATL, declaring that Chinese batteries pose a security threat.

In August this year, CATL began construction of its first overseas factory in Germany, but was opposed and complained by local Hungarians, who said that the plant did not meet the EU's groundwater situation directive in terms of water use, but still received a construction permit.

Industry insiders said that CATL, as a global lithium battery giant, will inevitably be targeted by different political forces, after all, in the game of the new energy vehicle industry between China, the United States and Europe, different countries and enterprises will inevitably give priority to their own interests, and leading companies such as CATL will also take the lead in standing on the cusp.

But even though the overseas market is facing so much uncertainty, it is imperative for CATL to fully enter the overseas market.

2. Car companies are gradually "de-ning".According to data from South Korean research institute SNE Research, the loading volume of CATL from January to October this year reached 2038 GWh to 36A market share of 9% tops the list.

However, compared with last year, the growth rate of CATL's loading volume began to slow down this year, and the growth rate in the first ten months of last year was 925%, compared to only 51 this year1%。In terms of the domestic market, CATL's market share in the first ten months of this year was 4276%, a decrease of nearly 10% from the peak in 2021.

Behind the "slowdown" in both revenue and installed capacity, new energy vehicle companies no longer want to work for CATL. Last year, the most famous saying in the new energy vehicle circle was that Zeng Qinghong, chairman of Guangzhou Automobile Group, said that "car companies are working for CATL".

According to public data, power batteries account for as much as 40%-50% of the cost of new energy vehicles. Since 2021, due to the full outbreak of the new energy vehicle market, lithium carbonate**, the raw material of the core component battery, has continued to rise, and the price of CATL's batteries has also increased many times.

Although the battery** is determined by the "supply and demand relationship", CATL only follows the market trend. But for car companies, the battery has seriously compressed the profit margins of enterprises, and more importantly, this part of the cost is completely not controlled by car companies, and putting autonomy in the hands of others is not a long-term solution after all.

Therefore, many car companies have begun to lay out the self-development, self-production and self-sales of power batteries as early as possible, including Great Wall, Weilai, Geely, BAIC, SAIC, Changan, etc.

Among them, Great Wall Motors incubated Honeycomb Energy, and this year it "cut off" CATL and won a large order of tens of billions of yuan from BMW. Recently, ZEEKR announced the official mass production of its 800V lithium iron phosphate ultra-fast charging "gold brick battery", before that, ZEEKR and CATL have maintained a friendly cooperative relationship, and even the first brand of CATL Kirin battery is ZEEKR.

It is not difficult to see that whether it is competition or alliance, domestic and foreign car companies will inevitably embark on the road of self-developed batteries, but if all car companies choose to develop their own batteries, then who else can CATL's batteries be sold to?

In addition to the declining market demand, CATL also has the pressure of overcapacity. In February this year, CATL threw out a "lithium mine rebate" plan to a group of car companies, that is, CATL promised to settle with car companies at 200,000 tons of lithium carbonate** by the end of this year, but the premise is that car companies promise to lock in about 80% of CATL's battery purchases.

When CATL threw out this agreement, the average price of battery-grade lithium carbonate was about 400,000 tons, which means that if CATL settles with car companies according to 200,000 tons, it will lose a lot of money. However, CATL dared to promise, and in the eyes of industry insiders, it also represents CATL's concern about the industry's overcapacity.

In essence, the "lithium mine rebate" is a gambling agreement, if the future lithium carbonate ** rises to more than 200,000 tons, CATL will control 80% of the purchase volume of most car companies in the next three years, and can also reduce the manufacturing cost of batteries with scale advantagesIf lithium carbonate** drops below 200,000 tons, CATL will make a steady profit.

Judging from the time node at the beginning of the year, considering the official withdrawal of new energy vehicle subsidies, the demand for new energy vehicles will fall in the coming period, and the production capacity of other battery factories will continue to grow, and the supply and demand mismatch cycle of power batteries will probably come to an end.

In fact, since the beginning of this year, the number of battery-grade lithium carbonate has been eighty percent, from a high of about 500,000 tons at the beginning of the year to about 100,000 tons at the end of the year. Some senior mining industry insiders said that the current lithium carbonate ** does not reflect the real supply and demand relationship of the market, but more because of the collapse of the new energy vehicle industry's expectations for market demand, driving enterprises in all links to destock at low prices.

At the 2023 China Automobile Chongqing Forum, Zhu Huarong, chairman of Changan Automobile, said that the domestic demand for power batteries is expected to be 1000-1200GWh in 2025, but the industry's capacity planning has reached 4800GWh, and there is a serious imbalance between supply and demand.

In fact, when car companies complained that they were working for CATL, CATL also responded that it was also struggling on the edge of profitability. It is not difficult to see that CATL also knows that it is actually "working" for lithium resources, so it also wants to win the right to speak in the face of upstream lithium resource factories through the group of car companies, but the car companies do not want to "make wedding clothes for Ningde".

3. The market is reluctant to dominate "King Ning".In the domestic market, CATL's market share is declining, and it has been replaced by power battery manufacturers supported or incubated by other car companies, including BYD, China Innovation Airlines, Guoxuan Hi-Tech, LG New Energy, Honeycomb Energy, etc.

In the first ten months of this year, CATL's market share fell by nearly 10%, while BYD rose by nearly 12%, which also means that the "de-ning" of car companies has had obvious results.

But more importantly, the current penetration rate of domestic new energy vehicles has approached 40%, once the penetration rate of an industry exceeds 30%, it means that it has entered a stable development stage from the outbreak stage, and domestic power battery companies have also set their sights on overseas markets.

Therefore, in addition to facing many uncertainties such as the war and policy factors in overseas markets, CATL also has to face the walls built by European and American countries for China's power battery factories.

Yang Bin, an analyst at Haitong International, pointed out that during the period from 2027 to 2030, Europe and the United States will realize the full localization of power battery manufacturing.

Therefore, whether it is a car company or a power battery factory, everyone has accelerated the pace of technological innovation. ZEEKR released the ultra-fast charging "Golden Brick Battery";Weilai brought a 150-degree ultra-long battery pack, and Li Bin even started a 14-hour ultra-long live broadcast for this purposeGAC Aion's P58 microcrystalline super cell has the ability to charge for 10 minutes and have a range of 250 kilometers.

Domestic car companies have developed their own batteries, and controlling costs is only one of the purposes, and more importantly, they hope to improve the endurance, fast charging speed and safety of power batteries through self-developed innovation. An Conghui, CEO of ZEEKR Intelligent Technology, once said, "Technology needs to be good and cost must be low, so that (car companies) can form core competitiveness." ”

Therefore, the essence of CATL's "domestic and foreign difficulties", in addition to the fluctuation of market demand, is that no car company wants to hand over the core technology to others, and no car company is willing to create another industry monopolist.

In the era of fuel vehicles, Bosch and some other auto parts companies that occupy a monopoly position in a certain market segment can have a profit margin of as high as 20%, while the average profit margin of many listed car companies is only 10%.

CATL, which feels the pressure of competition, is also stepping up its pace of technological innovation. At the 2023 International Automotive Electronics and Software Conference, Wu Kai, Chief Scientist of CATL, revealed that CATL is developing a slider chassis design centered on power batteries.

"Skateboard chassis" is a kind of ultra-high integration of customized car manufacturing platform, through the integration of the three electric system, braking, suspension and other core parts into the chassis, its biggest highlight is a high degree of integration, the chassis and the upper part of the vehicle can achieve split development.

According to Wu Kai, CATL has plans to make the slider chassis a chassis for a B-segment car, and is expected to achieve mass production in the third quarter of next year, which is also considered by industry insiders to be a signal for CATL to "build a car".

In the future, it is still too early to say whether CATL will become the "Huawei" of another direction, although it "does not make cars", but it empowers car manufacturing everywhere. But what is certain is that although CATL has performed poorly in the capital market, its overall performance is still very stable, and it is unlikely that major car companies will "break up" with it in the short term.

In such a basic situation, the core competitiveness of CATL in the future must be the technological strength of continuous innovation, and only by continuously consolidating its own moat can it resist the layout of car companies in the battery field. On the whole, there is competition to make progress, and the loss of the throne of "King Ning" is not necessarily a bad thing for the entire industry.