Power battery prices are forced to drop by 30% The entire supply chain is deeply affected

Under the trend of rapid decline in subsidies, vehicle companies require power battery companies to cut prices significantly. Since the beginning of this year, the prices of mainstream power battery companies have generally fallen by 20%-30% compared with last year.

Power battery companies have stepped up their cost control, and the areas of battery materials, manufacturing equipment, battery components, and BMS that are closely related to them have been affected. On the one hand, the gross profit rate of corporate products has fallen, and the overall profitability has declined. On the other hand, industry price competition has caused a certain degree of “chaos”. At the same time, the extended account period has caused capital chains to face industry risks.

Power battery companies quickly "cost reduction"

On October 26, Guoxuan Hi-Tech (002074) released its third-quarter report in 2017, which stated that it realized operating income of RMB 3.755 billion from January to September this year, an increase of 9.7% year-on-year; net profit attributable to shareholders of listed companies was RMB 640 million, It decreased by 13.27%. Guoxuan Hi-tech Co., Ltd. stated that the company has carried out a large-scale production line upgrade and process upgrade in the first half of the year, which has a certain degree of impact on production capacity and sales. Although the company has made significant progress in developing new customers and developing new products, with the general decline in the prices of domestic new energy vehicle power batteries in 2017, the gross profit margin of the company’s power battery products has dropped significantly, which has affected the overall profitability.

On October 20, CNAC lithium parent company Chengfei Integration (002190) revealed at the road show promotion that the price drop of battery products this year was more than 20% or even higher. Coincidentally, just last month, a person in charge at BAK revealed in a public meeting that the company’s product prices were down by 30% from the previous year; Zhou Jianzhong, vice president of Tianneng Group, said with CCTV on how to reduce the power battery price. The company achieved a 30% cost reduction; when it was surveyed, the company also revealed that the company’s products had fallen by a cent per watt hour. After combing, it is found that there are several ways for the power battery companies to rapidly reduce costs: First, negotiate with suppliers, reduce prices at materials and equipment, and extend the billing period; second, strengthen internal control and digestion during product design and manufacturing; The release and scale effect brought about a reduction in costs; the fourth was to lower the product gross margin.

Take Tianneng Group as an example, Zhou Jianzhong disclosed that on the one hand, Tianneng managed to control the cost by about 8% through internal control and digestion, significantly offsetting the price increase of raw materials (because of the rising prices of raw materials such as cobalt and lithium, the cost of power batteries will increase this year. 15%-20%) pressure; on the other hand, Tianneng has reduced the manufacturing cost by increasing the specific energy of the original battery capacity from 200 wh/kg to 260 wh/kg through the introduction of new materials and light weight. .

It is understood that Tianneng’s newly developed power battery has achieved breakthroughs in many aspects, shortening the charging time from the previous hours to about 7 minutes, and the application environment is expanding from -50 degrees Celsius to +60 degrees Celsius, and the cost is from Last year's 2.3 yuan / wh dropped to 1.6 yuan / wh, the cost reduction of 30%.

In response to the issue of cost reduction, Chengfei Integration responded to questions from survey respondents: “This year's product prices have fallen by more than 20% or even higher. We have taken a number of aggressive cost reduction measures, including negotiation with suppliers and technical design. Some of the considerations, etc., from the material side, we also reached a certain reduction target this year, but in general, the cost reduction does not have a rapid decline in product prices, so it affects the gross margin."

Chengfei integration also stated that regardless of state-owned enterprises or private enterprises, our market should be competitive in terms of our technological progress, scale, and release of production capacity. In fact, as the cost decline is not as fast as the decline in product prices, Gerry Wave can also disclose that the gross profit margin has dropped: "The company's gross margin was 39% last year, the net rate was 10%. In the first half of this year, the upstream raw material prices, the company's products per watt At the same time, the company’s gross profit margin dropped to approximately 32% in the first half of this year, and the net interest rate also decreased. It is expected that the gross profit margin for the whole year will remain at such a level of approximately 32%.”

Material/equipment/BMS supplier deeply affected

In the face of strong bargaining power battery companies, in addition to positive and negative materials in four key materials (raw material prices support the price does not fall or rise), the diaphragm and electrolyte gross profit declined.

Diaphragm field - The diaphragm was previously considered to be the key material for lithium batteries with the highest technical barrier, and the high threshold naturally leads to high gross profit. Since the beginning of this year, due to multiple factors such as technological progress, large capital investment, production capacity release, and downstream price reduction, the gross profit margin of the diaphragm has fallen by a large margin and has fallen by more than 10% year-on-year.

Leading diaphragm company Star Source Materials (300568) reported in the third quarter of 2017 that the continuous advancement of related technologies for lithium ion battery separator industry, the scale advantages of capital investment, and the rapid increase in production capacity are driving the gradual reduction of production costs. It also made the market competition increasingly fierce. During the reporting period, the sales price of the company’s products declined to some extent.

According to the announcement, the company's operating income in the first three quarters was 387 million yuan, an increase of 1.15% over the same period last year, and the net profit attributable to shareholders of listed companies was 9.17591 million yuan, a year-on-year decline of 25.73%. Among them, the third quarter operating income 140 million yuan, an increase of 8.92%; net profit attributable to shareholders of listed companies 20.8446 million yuan, down 31.79% year on year.