The China-led Battery Wars，Foreign Capital Reorganization in China

Foreign media said that US EV manufacturer Tesla is coming to China to build a factory to manufacture car batteries. This is not the first foreign company to target the Chinese electric car market. In the face of the coming foreign manufacturers, Chinese companies are making great strides forward. The development of domestically produced pure electric vehicles has given birth to huge demand for automobile batteries. Many auto manufacturers and capital have entered the development of lithium batteries. The battle for batteries in China, the world's largest electric car market, is about to heat up.

Tesla will reshuffle the foreign investment in China in China

According to the《Bloomberg Businessweek》website on May 5th, Tesla currently has a car assembly plant in California and a battery factory in neighboring Nevada. However, Tesla has recently decided to move the production of electric vehicle batteries and electric vehicles such as models to the world's number one electric vehicle market, China. It is planned to announce the construction address in China in the third quarter of this year.

"As far as the model is concerned, it may be the next quarter, but it will not be later than the fourth quarter at the latest." Tesla CEO Musk said in a conference call on company earnings. "We will announce the location of the Tesla China Super Factory soon."

Tesla is now stepping up its plans to build a plant in China, after the Chinese government announced in April that it will allow foreign-owned new energy vehicle manufacturers to wholly own the factory in China in 2018. Musk said the company's new plant will produce batteries and assemble cars.

According to the reference news network reporter, in addition to Tesla, Japan's Matsushita has also entered the Chinese car battery market. On March 13 this year, Panasonic's "New Energy-Specific Square lithium battery Factory" in Dalian, China, has officially started to produce goods. The battery giant launched a new battery manufacturing equipment last year and announced that it will be deployed at the Dalian plant. Mass production of automotive lithium-ion batteries. The plant is the first production base for Panasonic's automotive battery packs in China.

The reporter learned that South Korea's LG Chem has established a power battery factory in Nanjing, and another major global supplier, Samsung SDI, has already set up a plant in Xi'an. German car manufacturer Daimler has also set up a car manufacturing plant in China and plans to develop a power battery.

"External monks" have planned to enter the Chinese market to grab water and drink. Foreign-funded battery vendors in China are bound to set off a battle for competition. In the face of the same policies and environment, their layout in China will be reshuffled. In the face of the coming foreign investment, Chinese companies are neither afraid nor idle.

"Ningde" era people are no longer independent of their own desires and the world

The British "Financial Times" reported that China's electric vehicle supply is expected to be one of the main drivers of global lithium demand. Goldman Sachs expects that by 2030, China's supply of electric vehicles will account for 60% of the world, up from 45% in 2016.

Such a huge market, how Chinese companies will give up. Long before the announcement of the national new energy plan, many companies have already emerged in the field of power batteries or struggling.

The rapid improvement of the sense of existence is the Ningde era new energy technology (referred to as Ningde era, CATL). "Japan Economic News" described the company as a "new battery star" for Chinese electric vehicles. Ningde era has continuously achieved results in the field of commercial vehicle batteries. Recently, Ningde era signed a battery supply contract with German auto giant Daimler.

Ningde era has become a battery supplier for many multinational car giants, especially the entry into their global supply chain system is significant, marking the beginning of global competition between Chinese battery companies and Japanese and Korean battery companies.

Another industry leader, BYD, should not be underestimated. BYD is one of the first car companies to develop lithium iron phosphate power batteries. It not only supplies lithium iron phosphate batteries for new energy passenger cars and buses, but also supplies batteries for other bus companies. In 2017, BYD took advantage of it. The vehicle business embraces ternary lithium (also known as ternary polymer lithium battery, which refers to lithium battery using lithium nickel cobalt manganese ternary cathode material for cathode material).

According to reports, BYD plans to split the power battery business into independent operations and supply it to other new energy vehicle companies. This move, BYD power battery in the passenger car market, potential customers, will be several times the original. According to Shen xi, deputy general manager of BYD's lithium battery division, the power battery business will be split at the end of 2018 or early 2019 and is expected to be listed within five years.

In addition, Geely, Beiqi New Energy, SAIC and other manufacturers have invested in automotive power battery projects in recent years.

According to reports, domestic power battery companies Watmar, Guoxuan Hi-Tech, are trying to win more market share.

In 2017, the performance of companies such as BAK, Fenergy and Zhihang showed super high growth. Analysts believe that growth is due to their focus on ternary lithium-power battery production.

RWR Consulting said that Chinese companies have conducted more than $10 billion in lithium mining, mainly for auto companies and auto supply companies, compared with zero in 2016 and $178 million in 2015.

Foreign capital to China to reduce costs, the cost of Chinese enterprises is an advantage

Chinese battery manufacturers have been active in both the domestic market and the international market, and so far have produced outstanding results. However, this has caused many opponents' concerns, and the actions of some foreign-funded manufacturers coming to China can be seen.

For foreign battery manufacturers in China, GeekCar article believes that from the rhythm of the landing, the choice of local production in the Chinese market is more to reduce the cost of vehicle production. For electric vehicles, the cost of power batteries is the largest. As the new energy vehicle industry matures, the competition among major auto companies in terms of cost has also risen to a new level. What people are more willing to think about is how to seize this time window and provide competitively priced products as soon as possible. In this case, manufacturers usually choose to use power batteries as a strategic entry point for new energy vehicles.

According to the article, in terms of form, it can be divided into two types: the self-built battery factory of the vehicle enterprise or the joint venture with the battery enterprise. If the car companies choose to set up their own factories, it is undoubtedly more conducive to the integration of their own product lines, but the lack of the help of the traditional battery giants, is bound to encounter some challenges in the technical threshold. Once you decide to establish a joint venture with a battery company, you can reduce some technical difficulties and project risks.

For the advantages and shortcomings of Chinese battery manufacturers, the reference news network reporter interviewed Zhao Xiang, an automobile travel industry analyst. She believes that domestic policy incentives and government subsidies are strong, and the overall environment is more friendly than foreign countries. The cost is also relatively low. This is the advantage of Chinese companies.

At the same time, there are also weaknesses. Zhao Xiang said that compared with foreign brands, the technical performance and longevity of Chinese enterprises are slightly less, and there is still much room for improvement. This is the most important weakness at present.

In fact, the establishment of foreign-funded factories in China provides a very good opportunity for cooperation and market promotion for Chinese local enterprises, but there are also competitions and threats.

Zhao Xiang told reporters that the influx of foreign capital will cause competition and impact. For example, the supply choice of many high-end brands and models will divide the market share of local brands, but cooperation and competition can stimulate the development and improvement of technology and avoid policies. Companies under umbrellas cannot face the competition and challenges of the market.

Strong is strong, good opponents will inspire more potential.

2019 will be the turning point for the real popularity of Chinese electric vehicles. However, battery companies and car manufacturers are not on the same starting line. How to build an industrial chain that guarantees resources, manufactures and reuses resources, and China will undoubtedly become a "test field."

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