Three major battlefields for battery giants: technology war, price war, and brand war
By Helen
November 2nd, 2024
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In recent years, as the core link of the new energy vehicle industry chain, the development trend of the power battery industry has attracted much attention.
Despite the adjustment of the industry chain in the past two years, the price of the entire industry chain has dropped sharply, and the stocking and inventory turnover strategies of lithium battery companies have changed. The industry's production capacity has also shifted from a scramble for expansion to a cautious one. However, after more than a year of adjustment, the power battery industry chain as a whole has maintained a medium-to-high growth rate.
According to data from the China Automobile Association, in the first nine months of this year, the sales of new energy vehicles reached 8.32 million, a year-on-year increase of 32.5%. Driven by the sales of new energy vehicles, the installed capacity of power batteries reached 54.5GWh in September, a month-on-month increase of 15.5% and a year-on-year increase of 49.6%.
In terms of market size, the current sales of new energy vehicles account for less than 40% of the total sales of new vehicles. The new energy vehicle market still has a large room for expansion. Coupled with the growth of the energy storage market in recent years, market data predicts that lithium battery shipments will exceed 5TWh in 2030. Compared with the 886GWh of lithium battery shipments in 2023, the lithium battery industry is expected to continue to maintain an annualized growth rate of more than 20% in the future.
At the same time, with the continuous expansion of the lithium battery market, the output value of lithium batteries has exceeded one trillion yuan, and the competition among lithium battery companies has become more and more intense.
From ternary batteries to lithium iron phosphate batteries, from the pursuit of high energy density to the pursuit of fast charging performance, from passenger cars to commercial vehicle markets, and from the domestic market to the overseas market, the competition from leading battery manufacturers has started in all directions.
In particular, the competition in lithium batteries has entered the second half, and the competition between battery companies is not limited to production capacity. From the observations of the past few years, in this war without gunpowder, technology wars, price wars and brand wars have been throughout, becoming the three major battlefields of power battery manufacturers.
Technology war: the race for high-performance batteries
Technology war is the most basic competition among power battery manufacturers.
As new energy vehicles continue to increase their requirements for battery performance, power battery manufacturers have increased their R&D investment. Breakthroughs in this field will undoubtedly bring huge competitive advantages to companies.
Competition in the field of technology mainly revolves around breakthroughs in energy density, safety, and fast charging performance.
Among them, ternary batteries are constantly moving towards high-end, and ternary positive electrode materials are moving from medium nickel to high nickel and ultra-high nickel to match higher energy density. Rongke Technology previously stated that under the global industry market competition pattern, 5-series and 6-series ternary precursors are transforming towards 8-series and above high-nickel products, and the company's 8-series and above high-nickel products account for more than 50% of shipments.
In terms of lithium iron phosphate batteries, the energy density of the Shenxing PLUS battery released by CATL has exceeded 200Wh/kg, breaking the energy density record of lithium iron phosphate batteries. It mainly improves the volume utilization rate at the physical layer and improves the positive and negative electrode materials at the chemical layer, thereby improving the energy density.
The improvement of fast charging performance has been a technological breakthrough for battery manufacturers in the past two years. It is not only the improvement of battery charge and discharge rate, but also the upgrade of application scenarios.
Taking lithium iron phosphate fast charging as an example, since CATL released the first lithium iron phosphate 4C fast charging battery in 2023, Zhongxinhang, Ruipu Lanjun, Guoxuan High-tech, and Xinwangda have all deployed high-performance fast charging lithium iron phosphate batteries. In September this year, Ruipu Lanjun 5C lithium iron phosphate supercharged battery was successfully launched and applied to the whole vehicle. The technical competition between battery companies has filled the fast charging shortcomings of lithium iron phosphate batteries and released new increments to the downstream market.
Fast charging technology has also been popularized in the application of market segments such as PHEV and commercial vehicles. Honeycomb Energy has launched the industry's first 4C hybrid short knife battery cell; CATL has released the Tianxing commercial vehicle battery, of which the Tianxing L supercharged version supports 4C fast charging; the commercial vehicle supercharged battery Kaiyuan battery released by Yiwei Lithium Energy uses 3C supercharging technology, which can be charged from 20% to 80% in 15 minutes.
In addition to the improvement of energy density and fast charging performance, battery companies are competing in cutting-edge technologies, and all-solid-state batteries have become a focus of competition among battery manufacturers.
Since the beginning of this year, major battery manufacturers have successively announced their own all-solid-state battery mass production schedules. CATL plans to achieve small-scale production of solid-state batteries in 2027; Guoxuan High-tech's all-solid-state batteries plan to be put into small-scale vehicle experiments in 2027, and are expected to achieve mass production in 2030; Xinwangda plans to have the ability to mass-produce all-solid-state batteries in 2026.
Price war: comprehensive promotion of cost reduction and efficiency improvement
Price war is the most direct competition among power battery manufacturers. As competition in the new energy vehicle market intensifies, power battery manufacturers have been competing for market share by cutting prices. Data shows that since 2023, the price of power batteries has shown a downward trend. At present, some second-tier companies have even reduced the price of batteries to 0.3 yuan/Wh.
The most direct factor driving the decline in battery prices is the decline in raw material prices, but in addition, based on market strategies and customer binding principles, battery companies have also promoted cost reduction and efficiency improvement in various ways and launched price-competitive products.
Previously, CATL implemented a "lithium mine rebate" plan to reduce the purchase price of cooperative car companies. Among them, the price of lithium carbonate for some power batteries of CATL was settled at a certain price level lower than the market, but the car companies that signed the cooperation needed to promise that no less than 80% of the battery purchases came from CATL. This move is aimed at binding long-term orders and consolidating CATL's market position.
BYD's Fudi Battery also urged the team to continue to reduce costs through internal notifications. BYD has achieved maximum benefits through layer-by-layer screening, eliminating inferior products and retaining superior ones, and full bidding and bidding, and plans to continue to strengthen the management and control of non-productive materials to reduce costs and increase efficiency.
Other battery manufacturers may adopt a more direct price reduction strategy to sell their battery products at a certain market discount coefficient to compete for market share.
Manufacturing cost reduction is another important means to help battery product prices fall. This includes not only the reduction of manufacturing equipment procurement costs, but also the introduction of more advanced automation equipment and intelligent management systems by battery companies to improve production efficiency and reduce labor costs. For example, stacking machines, winding machines, liquid injection machines, mixers, coating machines, etc. are all evolving towards intelligence, scale, and precision.
In addition, CATL said that in the TWh era, computer vision, machine learning, cloud computing, big data and other technologies are key means to continue to improve the extreme manufacturing system. Honeycomb Energy not only uses AI technology for material selection and formula optimization, but also applies it to knowledge management and process manufacturing, thereby reducing product defect rates and improving production efficiency and quality.
Price wars are not just competition between companies, but also about increasing the penetration rate of terminal consumer applications. From the perspective of any mature industry, the scale and popularity of products must be accompanied by a drop in prices, thereby increasing consumption levels. The application of the lithium battery industry now extends not only to new energy vehicles, but also to household storage, 3C, aviation, etc. Under the requirements of downstream applications and consumption, the price war in the lithium battery industry may continue.
Brand War: Shifting from 2B to 2C
Brand war is an important battlefield for power battery manufacturers in brand building and market expansion. With the increasing maturity of the new energy vehicle market, consumers' awareness and trust in battery brands are increasing. Therefore, power battery manufacturers need to use effective marketing strategies to shape their brand image and improve brand awareness and reputation.
CATL has made useful attempts in this regard. With a strategic shift from facing enterprises to facing consumers, CATL is shaping a new brand image. Through joint releases, the establishment of joint ventures, and the expansion of offline stores, CATL's "to C" marketing strategy not only helps to enhance the brand image, but also helps companies better understand consumer needs, thereby optimizing product design and production.
CATL, BYD and other leading power battery companies also actively demonstrate their technical strength and product advantages by participating in well-known domestic and foreign exhibitions, releasing new products, and holding technical forums.
More and more battery companies not only focus on product quality and performance, but also increase customer stickiness and brand awareness through differentiated customer service. For example, CATL launched the Shenxing Car Owner Club to win the trust and loyalty of customers. Some upstream companies provide a full range of pre-sales, sales and after-sales services, including technical consultation, solution design, installation and commissioning, repair and maintenance, etc. In addition, these companies also understand customer needs and feedback through regular return visits and customer satisfaction surveys in order to continuously improve products and services.
Today, with the continuous development of the new energy industry, competition among battery companies will become more and more sufficient, which also means that the market differentiation among battery companies is becoming more and more obvious. In the short term, the intensification of market competition will weaken the profitability of enterprises and hinder their expansion. But in the long run, this benefits consumers and downstream customers, improves battery performance and quality, and ultimately promotes the overall upgrading of the industrial chain.
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