Taking stock of China's lithium battery industry in 2023, involution and going overseas are probably the "greatest common divisors" in different summaries.
At the beginning of January of this year, the domestic lithium carbonate spot market was still running at the level of 500,000 tons, and by the end of 2023, lithium carbonate ** has fallen below 100,000 tons.
Source: Station B.
From food, footwear, clothing, furniture, cultural and creative listed companies competing for cross-border, to the overall overcapacity of the upstream and downstream, the overly drastic turn caught the industry off guard, recalling the warning of the industry boss Liu Jincheng at the end of 2022: "It is expected that there will be overcapacity in the whole industry chain at the latest in the year after tomorrow, and the only thing that will not be surplus is high-quality, low-cost battery products", but reality has proved that "high-quality, low-cost battery products" are also difficult to escape from oversupply and the ensuing tragic involution.
Liu Jincheng, chairman of EVE Source: Sohu Technology.
At the end of 2023, the open market has fallen to 04 yuan Wh, the head car companies can often get a cheaper **business**, such a **, can not help but make many industrial people feel "refresh the three views", such ** for a considerable proportion of lithium battery cell manufacturing enterprises, it means that even if you don't want a penny of profit, you can't cover the cost of raw materials and labor, machinery and equipment.
In 2023, going overseas is undoubtedly an aspiring action of China's lithium battery industry chain, according to industry consulting agency statistics, in 2023, China's overseas installed capacity of lithium battery products has exceeded100gwh, the total overseas capacity investment of industrial chain enterprises exceeded200 billion yuanRenminbi.
Source: Energy Circle.
Although the business model of "external volume" looks so good: high product prices, high gross margins, low energy costs, and large subsidies, but when everyone forms a consensus expectation and acts collectively, then the result is often the opposite, in fact, in the face of the large influx of China's lithium battery products and production capacity, the two major economies of the United States and the European Union have produced an obvious "rejection reaction" in 2023. At the end of that year, the official implementation rules for new energy vehicle subsidies in the United States were tailor-made for Chinese lithium battery companies as a so-called "foreign entity of concern" status, as long as there is more than 25% of the share of Chinese enterprises in the battery value chain, they will not be able to obtain tax credits.
On February 9, under pressure from the U.S. Congress, the U.S. utility company Duke Energy finally decided to remove the energy storage batteries produced by the Chinese battery maker CATL from Camp Lejeune, one of the largest Marine Corps bases in the United States, and will phase out CATL products from civilian projects.
Compared with the Americans, the European market's response to China's lithium battery industry is more subtle but also hidden, such as the EU's new battery law clearly stipulates the requirements for lithium battery carbon footprint declaration, and the follow-up is highly likely to block the import of some products with product carbon footprint performance, as for the product carbon footprint accounting standards, who has the final say? The Europeans themselves, of course.
Part of the layout of China's lithium battery industry chain in Europe Source: Observer.com.
Behind the hustle and bustle of involution and going to sea, many new phenomena in the industry in 2023 have also made a topic worthy of deeper thinking emerge: how to deepen the value of the lithium battery industry?
At present, the lithium battery industry, which is struggling between profit and loss, seems to have faded a lot of filters of "science and technology" and "futurism".
Once upon a time, when the public talked about lithium batteries, it seemed to be a sci-fi scroll of global energy consumption structure change, but in 2023, even if Musk solemnly launched the third chapter of the so-called secret grand plan, expounding his "feasible plan" to achieve global clean energy transformation, it still did not stir up many waves in the capital market.
The crux of the problem may lie in the fact that the consensus on the accelerated penetration of new energy vehicles is diverging in the face of market reality. In 2023, Toyota will continue to be the world's largest car company with 11.2 million new car sales, with total sales increasing by 7% year-on-year2%, but the total sales of pure electric and plug-in hybrid vehicles accounted for less than 5%, which is almost negligible, which reflects the global market of traditional fuel vehicles, which is still stable, and also provides new enlightenment for the dynamics of new energy vehicle market penetration.
Source: Qianzhan Network.
Although this has successfully established a first-mover advantage for Chinese car companies in the wave of electrification, the Chinese new energy vehicle market has also unexpectedly discovered the phased limit of consumer demand, and in 2023, even in China's domestic market, the penetration rate of pure electric vehicles has entered a consolidation pattern, and at the same time, plug-in hybrids The rapid increase in the penetration rate of extended-range vehicles shows that end consumers favor gradual transition, and the product features such as fast charging and large batteries promoted by pure electric vehicles this year have not completely dispelled the anxiety of pure electric range.
Huawei's liquid-cooled supercharging station on the Yakang Expressway in Sichuan.
Since the pure electric products have reached such a point, and they have not shown an advantage over hybrid products in terms of mass market penetration, the overseas incumbent giants can naturally choose to hang up the war-free card, and do not accept the overall situation at this time, all in pure electricity, and unnecessarily bear the cost of forcibly "oil and electricity at the same price".
Under such a game, the first-mover advantage of domestic new energy vehicle companies may turn into a "first-mover trap", and the "tuition" paid by Chinese companies to polish the maturity of pure electric technology and the ability of the first chain is equivalent to reducing the uncertainty of overseas car companies' decision to postpone entry.
At the same time, the lithium battery industry is naturally impossible to fight in the new energy vehicle market, and under the pressure of the whole industry chain of domestic car companies to reduce costs, lithium battery companies have no choice but to give up profit margins.
This weak position in the upstream and downstream game, both the reversal of lithium battery supply and demand, but also unexpectedly highlights the bitter reality of the current product homogenization of the lithium battery industry, even if some leading enterprises can still enjoy a certain brand premium and channel barriers, but in general, the bulk commodity attributes of lithium battery cells have been fully exposed, and it seems that it is no longer a field that can tell the story of science and technology.
Processing link Source: pixabay
In the minds of the public, the "best narrative" of science and technology is inseparable from the "sweeping" level of market performance and exponential technological progress, in this era of Moore's law everywhere, the technology industry, the future industry, it seems that the Intel CPU is to personal computers, Qualcomm SoC, Sony CMOS is to smartphones, with the magic of "xx inside".
However, are Chinese lithium battery manufacturers also able to benchmark Bosch, Denso, ZF and Magna in the eyes of downstream car companies? Why is it that the gross profit of lithium battery companies has made car companies boil, but the gross profit level of 30% or even % of overseas electromechanical and electronic component giants will only usher in admiration and applause?
There is no doubt that lithium battery is a technology-intensive industry, but the "technology density" of the industry is not equal to the "technology gradient", microelectronics and other industries with a deep "technology gradient", the continuous jump in performance can enable leading enterprises to create more and more strict technical barriers in the existing market, and to capture new blue ocean opportunities in the strong technology spillover trend.
Source: Tencent Technology.
On the other hand, display panels, lithium batteries and other industries, although they account for a very high proportion of the cost composition of downstream system products, and are themselves typical capital and technology-intensive formats, but unlike microelectronic products, there is a clearly perceptible upper limit (pixel density, energy density) in the evolution of their technical characteristics.
Economist Theodore Wright (Theodore Wright) in 1936 refined this law, aimed at characterizing the decline trend of product cost with mass production, can be simply understood as the cumulative output if doubled, the cost will drop by a constant percentage, it is not difficult to find that the LCOE curve, which is often used to show the progress of the lithium battery industry, is an example of Wright's law.
Lithium Mine Source: pixabay
In an industry dominated by Lai Ze Law Firm, the efficiency of mass production will become the only value coordinate in fact, and it is the most important capability of enterprises to obtain more than average profits from undifferentiated products with higher cost control efficiency.
In the context of super surplus, is Wright's law the fate of the lithium battery industry?
In 2023, China's lithium battery companies will also be active in exploring the curse of Whit's law, and as a global leader in the lithium battery industry, CATL is the most noteworthy representative.
In the field of carbon reduction and carbon reduction, CATL has carried out a lot of explorations, and its subsidiary Times Green Energy has entered the construction and operation of wind, solar and storage investment, and is expected to build about 300MW of distributed photovoltaic by the end of 2023, and Ningwang's current centralized new energy has also reached 4000MW, including 2400MW of wind power and 1600MW of photovoltaics.
Source: CATL official website.
In the field of energy storage, CATL's energy storage battery shipments have continuously maintained the world's first, unlike other manufacturers who only regard it as a channel to digest production capacity, CATL has made a lot of exploration in application scenarios, and has rolled out many demonstration projects in China and even around the world, such as Southern California 1The world's largest single energy storage project of 8GWh, the first independent grid-connected large-scale energy storage power station demonstration project managed by a non-grid enterprise in Jinjiang, Fujian Province, and the development of the Ningde offshore wind farm project, which has attracted wide attention, have also been approved recently.
Source: Interface.
Regarding the intention of these explorations, a person from CATL once said frankly: "Sometimes doing these things to make money is secondary, and the most important thing is that in these processes, whether it is the power supply side or the grid side, or in a variety of different business application scenarios, you can find some of his logic in it, and you can develop some new business models."
The history of many industries has revealed that the lithium battery industry must change from the role of being integrated to the leader of system integration, so as to grasp the initiative of value integration.
It is worth noting that on February 2, 2024, CATL registered and established Times Carbon Asset Management (CATL)**, whose business scope includes carbon emission reduction, carbon conversion, carbon capture, carbon sequestration technology research and development, etc., proving that the company's application scenarios and business models in the low-carbon and zero-carbon field are still deepening, and such exploration has also provided valuable inspiration and demonstration for the industry.
CATL established a carbon asset company Source: Sohu.
The high-quality development of China's lithium battery industry in 2024 will continue to develop.