Beware of lithium battery investment

In the first quarter of 2013, ModelS topped the list of luxury cars in the United States and achieved profit for the first time in the quarter. Tesla’s share price has risen by 249 percent this year.

Tesla's success has rekindled hope in China's power automotive industry.

The recently released 2013 version of the new energy vehicle subsidy policy added another fire to the renewed hope. However, the key issues in the development of new energy vehicles and power battery industries are not subsidy, but technological breakthroughs and consumption. At the same time, the industry is still very worried about the reversal of the “bad effects” brought about by the new subsidy policy in 2009. Investors flock to the power battery industry. The key lithium-ion-material production technologies, such as separators and lithium hexafluorophosphate, that have reached 80% of their foreign dependence, have been broken. The price dropped sharply. The ultimate result is that most of the power battery projects suffer losses.

Investment Overheating The "Notice on Continuing the Promotion and Application of New Energy Vehicles" was jointly announced by four ministries, the Ministry of Finance and the Ministry of Industry and Information Technology. The "Notice" stated that it will continue to implement the application of subsidies for the promotion of new energy vehicles from 2013 to 2015. At this point, the subsidy policy for new energy vehicles, which lasted for nine months in the “open window period”, was again launched.

Compared with the previous new energy subsidy policy, the new subsidy policy has a number of improvements: First of all, "direct subsidy to the enterprise" is the biggest highlight of the new round of subsidy policy. Second, the new subsidy policy seeks to curb the negative effects of “local discriminatory subsidies” in the previous round of subsidies by setting the minimum proportion of foreign car manufacturers’ sales volume. Third, the new policy will no longer mandate subsidy from local governments, but The central government will uniformly distribute subsidy funds.

On the whole, the New Deal made up for some loopholes in the old version of the subsidy policy and it has a certain positive effect on advancing the development of new energy vehicles. However, it is not difficult to see from the effect of the previous years that the key issue of new energy vehicles is not the subsidies but the innovation of battery technology, the construction of supporting facilities and the acceptance of consumers.

In the opinion of some interviewed people in the industry, the new subsidy policy may stimulate the Chinese lithium battery industry to run out of danger. The industry's "destructive warfare" brought about by the lithium battery subsidy policy in 2009 is still fresh in people's memory: Senior engineers' lithium-ion data show that in 2008 there were only 10 lithium-ion battery companies in China, and by the end of 2012, it had reached 105. A large amount of money was put into the lithium battery. After three years, the industry’s capacity was seriously oversupplied, the price of the product was drastically reduced, and part of the operating rate was less than 10%. So far, the industry has suffered bitter results.

The data shows that since 2009, the power battery price has dropped by 30% to 50%. Taking the electric core as an example, its price is more than 5 yuan/A to more than 2 yuan; while the capacity utilization rate is currently less than 30%. "Little profit, even if the subsidies are in place." Luo Huan-teng, senior analyst of high-tech lithium battery said.

However, Luo Huan-tower believes that the current lithium battery is still in its infancy, the development space will be very large, and the expansion of the company's production will be a long-term goal.

Lithium iron phosphate technology line is most questioned is the company invested lithium iron phosphate.

Currently used secondary rechargeable batteries include lead-acid batteries, nickel-cadmium batteries, nickel-hydrogen batteries, and lithium-ion batteries. Some experts said that although lead-acid and nickel-hydrogen still dominate the current and future years, lithium-ion batteries will quickly seize the traditional battery market.

The lithium ion battery is composed of a positive electrode, a negative electrode, an electrolyte, and a separator. The positive electrode material has the greatest influence on the battery performance. Lithium-ion power batteries are divided into two grades based on positive grade materials. At present, there are two basic technical routes in the world. One is the lithium manganate line represented by Japan and South Korea, and the other is the lithium iron phosphate line represented by China and the United States. A few years ago, a number of Chinese experts believed that the lithium iron phosphate line is currently the most suitable lithium-ion battery for the industrialization of electric vehicles.

Ever since, lithium iron phosphate investment has become hot, BYD, Tianjin Lishen, Bick and other industries Chu Qiao have entered the river. Unfortunately, sales of electric vehicles have not kept pace. According to statistics from the Institute of Lithium Ionization, the production of lithium iron phosphate increased from 600 tons in 2009 to about 4,000 tons, but the price dropped from 200,000 yuan/ton to 80,000 yuan, a drop of 60%. The actual production capacity of the entire industry is 450,000 tons, that is, the operating rate is less than 10%.

In 2012, new energy vehicles accounted for 57% of the power lithium battery market.

The economic effect is not good or temporary, but if the technical route is biased, the trouble is not short-term.

In the past two years, the question of lithium iron phosphate batteries has gradually increased. In May 2012, Shenzhen’s hottest BYD E6 caught fire after a rear-end crash. Three people in the car died on the spot. This was the first case in which a pure electric vehicle caught fire and killed passengers.

More generally, the current poor performance of lithium-iron phosphate-based power cars in the range of mileage, consistency control, etc., has caused the industry to become awkward.

Looking around the world, Lithium iron phosphate power batteries are devastating. Dongxing Securities Chen Peng revealed that the top three giants in the lithium iron phosphate industry bankruptcy A123 bankruptcy auction, Aptera bankruptcy, Ener1 bankruptcy was acquired, Fikser bankruptcy, Coda company bankruptcy.

Someone will think of Tesla. Tesla's success is an indisputable fact. But in terms of batteries, the Model S uses the 18650 cylindrical lithium battery, which is currently the most mature and the lowest cost, namely the traditional nickel-cobalt-aluminate lithium small-cylinder battery. It is completely different from the large lithium iron phosphate battery used in domestic electric vehicles.

Interestingly, although the overcapacity is serious, people in the industry have revealed that it is planning to produce 11 million tons of lithium iron phosphate in the future. "Some are for enclosures."

The news that diaphragm electrolyte solution technology breaks through the revitalization of people's hearts is also there, that is, diaphragm, lithium hexafluorophosphate domestic technology breakthroughs, the future import substitution space has been opened.

Jiangsu Guotai is the largest lithium-ion electrolyte in China. Before 2010, he was most worried about the import of lithium hexafluorophosphate as an electrolyte raw material. Lithium hexafluorophosphate accounted for about 50% of the cost of the electrolyte. At that time, the selling price was 340,000 yuan/ton and the gross profit rate was as high as 75%. However, at that time, no enterprise in the country could produce lithium hexafluorophosphate, and the market was basically monopolized by three companies in Japan, Morita Chemicals, Kanto Electrochemistry and Central Glass. In order to solve the problem of raw materials, Jiangsu Guotai decided to independently develop lithium hexafluorophosphate, and entered the pilot test program around March 2009.

In November 2012, Jiangsu Guotai forced the termination of the pilot trial of the lithium hexafluorophosphate project and the direct construction of a 300-ton/year lithium hexafluorophosphate project. According to company executives, with the changes in the market and the situation, if you continue to conduct pilot tests, you may lose market opportunities.

In fact, since 2011, Fluoride and Jiujiu have achieved mass production of lithium hexafluorophosphate and successively launched the 1,000-ton expansion project.

According to industry insiders, there is still a gap between the quality of lithium hexafluorophosphate produced in China and Japanese companies, but the gap is gradually narrowing. In addition, China has abundant fluorite resources and lithium hexafluorophosphate production companies have significant cost advantages. According to Shanghai Sheng Yong International Trade, the domestic liquid manufacturers have begun to switch to purchase domestic lithium hexafluorophosphate. At present, Shanghai Sheng Yong International Trade has ceased the agency business of Guandong Lithium hexafluorophosphate products.

The large release of China's production capacity has lowered the market price of lithium hexafluorophosphate: 335,000 yuan/ton in 2010, and the lowest 15 million yuan/ton in 2012, and the current price is 120,000 yuan/ton.

The rapid decline in the price of lithium hexafluorophosphate has affected the benefits. For the first half of this year, the net profit of DFG dropped by 60% to 100% year-on-year, with a profit of 10,000 yuan to 1,695,800 yuan. In the first half of the first nine months, the net profit was 20,353.6 thousand yuan to 3,392.27 million yuan, a change of -55% to -25%.

The downstream electrolyte industry ushered in good news. Jiangsu Guotai's first-half net profit of 89.58 million yuan to 120 million yuan, an increase of 0% to 30%; mainly due to the steady growth of Huarong Chemical Business; Xinzhou State net profit in the first half of this year decreased by 5% -15%, net profit 50.7317 million yuan -57.70 million yuan.

Securities analyst Xiao Hui is optimistic about the market space for lithium hexafluorophosphate. He believes that in 2012, production capacity of lithium hexafluorophosphate in Japan and South Korea will be nearly 5,000 tons, and the price of lithium hexafluorophosphate will be 200,000 tons. The market for the replacement market will be about 1 billion yuan.

The diaphragm development logic is similar to lithium hexafluorophosphate. Around 2010, the global lithium battery separator was dominated by Japanese and U.S. companies. It is estimated that in 2011, the domestic demand for lithium battery separators was approximately 170 million square meters, including 120 million square meters imported lithium battery separators, which accounted for 71%; the three major domestic diaphragm manufacturers were Jinhui Gaoke, Xinxiang Greian, and Shenzhen Xingyuan. Jinhui Hi-Tech Co., Ltd. is the earliest company to mass-produce diaphragms in China. Unfortunately, after internal struggles, Fossu Technology has few equity interests in it.

According to reports, since last year, domestic diaphragm manufacturers have changed from more than a dozen to more than 20, including listed companies such as Chuzhou Pearl, Nanyang Science and Technology, and Dadongnan, etc. They have also started to tackle power battery diaphragms, among which the Pearl of Chuzhou is in volume production. With the breakthrough of membrane technology and the rapid increase in localization, the price of membranes has fallen by 33% year-on-year.

According to industry insiders, Nanyang Science and Technology and South East are rarely seen on the market. Chuzhou Pearl Diameter Production Line Market is generally evaluated.

Cheng Fei integration is a hot topic of market speculation recently. The company's diaphragm technology allegedly achieved breakthroughs in R&D. Regardless of the ultimate success or failure of the industrialization of the technology, how long does it take? Now the diaphragm is not a "sweet potato." The reporter learned that the situation is that Chengfei will not integrate the production of its own technology, but in cooperation with others to produce.