Japan and South Korea batteries have returned to the white list, have to return to the market?

Recently, Japan and South Korea's power battery "send the news":

On May 17, the Wall Street Journal reported that Geely Automobile and LG Chem cooperated in the production of batteries;

On May 22, the first batch of whitelists for the automotive power battery industry was announced, and three Korean battery companies, Samsung Ring New, Nanjing Lejin and Beijing Aisi Kai, were shortlisted;

In addition, Samsung SDI, South Korea SKI, Panasonic and other companies claim to build or expand battery materials or batteries in China...

Many media reported that Japan and South Korea's batteries have returned to the Chinese market and warned Chinese power battery companies to fight. Has the Japanese and Korean batteries really returned to the Chinese market? If you open up the battle, what is the real power of the Japanese and Korean batteries and the Chinese power battery?

"White list": once bitten by a snake, ten years afraid of the rope

After more than two years, another "white list" in the power battery industry was born. The foresight of the car is not far away, the foreign power battery responded positively and was among the first in the list.

"Whether it is counted, as long as 1% is possible, we must do 100% effort." A senior executive of a foreign-powered battery company said.

Time flies back to October 12, 2015, the Ministry of Industry and Information Technology released the "Automobile Power Battery Industry Standard Conditions" catalogue (first batch). The list was initially unrecognizable, but it proved to be effective. The actual subsidy for new energy vehicles was called the “white list” by the industry. If the matching battery is not on the white list, the whole vehicle will not receive the subsidy. Since then, four consecutive batches of whitelists have not seen the presence of Japanese and Korean power battery companies, and thus have been excluded from China's fiery power battery market.

This white list came again, and the publishing unit became the China Automotive Power Battery Industry Innovation Alliance. Dong Yang, executive vice president of China Association of Automobile Manufacturers, is also the chairman of China Automotive Power Battery Industry Innovation Alliance. He is clear to the media that the white list is not linked to subsidies and is not mandatory.

However, the psychological shadow of foreign power battery companies is still there, so three Korean battery companies will be selected in the first batch.

Going back to the whitelist and returning to the market?

In the absence of foreign-funded power batteries for more than two years in the catalogue of "Automobile Power Battery Industry Standard Conditions", they were basically excluded from the Chinese market and domestic production capacity was converted to exports.

Returning to the "white list" of "not mandatory declaration, not linked to subsidies" means that foreign-powered batteries have returned to the Chinese market?

Reference can be made to the list of new energy vehicles in the recommended catalogue of electric vehicles supporting foreign-funded power batteries. The models in the recommended catalogue of new energy vehicles can obtain subsidies, and they are also the models that will be listed and ready to go on the market. Therefore, the distribution of supporting power batteries is the forerunner of the final market share distribution.

Let's take the latest batch of recommended directories as an example. From June 12th, China's new energy vehicles will officially implement the 2018 subsidy policy. In order to clarify which models meet the 2018 subsidy requirements, the Ministry of Industry and Information Technology has sorted out the list of pre-new energy vehicles recommended, and released the latest batch of 2018. The fifth batch of "Recommended Models for Promotion and Application of New Energy Vehicles".

According to the statistics of the electric vehicle resource network, Samsung SDI, LG Chemical, Panasonic or SK are not seen in the passenger cars and buses entering the fifth batch of recommended catalogues. However, in the passenger car, there is a Changan Ford plug-in hybrid car equipped with the power battery of the US FordMotor Company.

Interestingly, Changan Ford’s car entered the “Road Motor Vehicle Manufacturing Enterprise and Product Announcement” on the 297th batch on June 15, 2017. In the same batch, Dongfeng Yueda Kia model is equipped with Nanjing Lejin Chemical Battery, and the Great Wall Motors are equipped with Nanjing Lejin Chemical Battery, but they have not entered the recommended catalog.

In addition, in 2017, AESC and Sanyo Energy (Suzhou) Co., Ltd. two Japanese power batteries have entered the recommended catalog. However, the Korean power battery has never entered the recommended catalog.

Overall good, but it will take time

"The overall environment of foreign-funded power batteries is definitely good," said the executives of the aforementioned foreign-powered battery companies. He also mentioned that on May 24, Minister of Industry and Information Technology, Miao Wei, and Minister of Industry and Trade Resources of the Republic of Korea, Bai Yunqi, co-chaired the third China-Korea Industrial Cooperation Ministerial Dialogue. Li Dong, director of the Equipment Industry Department in charge of the automobile, also participated in the dialogue.

Another power battery company commented on recent developments and said that it is not easy to judge. On the one hand, the whitelist of power batteries may not be a paper tiger, but may also be rigidly tied to other policies. On the other hand, although foreign-funded power battery companies are rarely seen in the announcements and recommended catalogues, foreign-funded batteries are originally equipped with more foreign-owned automakers. They plan to introduce new energy vehicles in 2019 and 2020, and are now listed. There are very few models. Therefore, it is not possible to conclude now that the foreign power battery market is small.

He suggested that the whole vehicle enterprise should re-match the battery, and domestic enterprises should design, test and verify for about 8 months; mature foreign-funded enterprises may take 12 months. Therefore, foreign power batteries must be seen in the market and it will take time.

A purchasing director of a Chinese new energy auto company said that although foreign-powered battery companies hope that automakers will try to report the announcements, the automakers respond less. “Submission of an announcement requires a lot of energy, time and expense, as well as psychological costs.”

He said that in the second half of the year, if there is any clearer trend, let’s see if it is ready to support the foreign-funded power battery. “A group of companies are also considering the problem of no subsidies. In addition, the better domestic battery companies are too bullish and hope that foreign capital will come in balance.”

Analysis of Advantages and Disadvantages of Chinese and Foreign Power power batteries

Foreign-funded power batteries have lost more than two years of rapid growth opportunities in China, but by 2020, they will also have a chance to compete with domestic power battery companies.

"The vast majority of domestic power batteries and Samsung, the gap is not a little bit." The aforementioned purchasing director said, for example, in terms of yield, foreign investment is 95%, 98%, and domestic companies are good 90%.

In terms of price, when the previous round of foreign power battery companies entered the Chinese market, the price was very competitive. This time, although the car companies are still afraid to support Korean batteries. But (price) "has been communicated, it will be very good."

He said that although foreign capital has been lost in China for more than two years, for most battery companies, "it will not work for another year or two."

“The one who can talk to them is the CATL (Ningde Times) family.” He added, “For CATL, there is another half a year, and Jiangshan is more stable. In addition, CATL is improving its product advancement and energy density. It is also quite fast."

How do foreign power battery companies look at this opponent? The above-mentioned foreign-funded power battery company executives said that in terms of cost, foreign-funded power batteries are still in the doldrums because "the materials used are the best." Foreign-funded batteries, such as Samsung, have better consistency, and square batteries do not need to be divided. However, "power battery technology is very fast, and companies must constantly introduce new products. If companies such as CATL can continue to invest, there are opportunities to compete with foreign power battery companies."

Another foreign-funded battery source said that CATL is undoubtedly a great company with strong technical strength and is undeniable. It has passed the certification of so many companies, and the high evaluation is not excessive.

CATL has indeed become a leading supplier of power batteries, not only in its market share (11.84GWh in 2017, ranking first in the world according to the rank of high-tech lithium battery), but also in the first-class of Volkswagen, BMW, Daimler, etc. The car company signed a supply agreement with it.

How does CATL self-evaluate?

On May 29th, the IPO Ningde Era (300750) will be listed on the online road show. Some netizens asked Zeng Yuqun, chairman of CATL, what is the competitive advantage of CATL? Zeng Yuqun said that 1 perfect R&D system, comprehensive technical advantages; 2 outstanding market position, significant scale advantage; 3 high-quality management team, outstanding team advantage; 4 deep industrial chain cooperation, strong integration advantage ; 5 strict production quality system, safe and reliable product advantages.

These five points, in the PK China power battery opponents, are indeed all measures, in the face of foreign power battery companies, the more prominent is the current market position, as well as the integration of the industry chain.

However, all the power, the number of power batteries, but also after the subsidy. After the subsidy tide receded, the market position of China's power battery companies was like a building above the sand dunes, and it still revealed a solid foundation that had already been laid. Only time can tell us.

The page contains the contents of the machine translation.