Original title: It is doubtful whether a number of battery manufacturers will be able to implement the price increase signal
Securities Times reporter Mao Kexin
The voices of power battery price hikes one after another, but the real completion of the downward transmission still needs to negotiate with strong automakers.
BYD raises prices
A few days ago, a “Battery Price Increase Liaison Letter” showed that BYD (002594) decided to increase the unit price of CO8M and other battery products. The product price including tax will increase by no less than 20% on the basis of the current Wh unit price, November 1, 2021. Starting from today, all new orders will sign a new contract and implement the new price, and all unfulfilled old contract orders will be closed and cancelled.
The price increase is mainly due to the increase in raw material prices. BYD said that due to market changes and superimposed power and production restrictions, compared with December 2020, lithium battery raw materials will continue to rise in 2021. The price of cathode material LiCoO2 will increase by more than 200%, the price of electrolyte will increase by more than 150%, and negative electrode materials. The continued tight supply has led to a substantial increase in overall costs.
The price increase means that battery manufacturers can transmit the cost of upstream raw materials downward, which will bring benefits to the company’s profits. The stock price was the first to show a positive reaction. On October 26, BYD opened 4% higher. The stock price once touched 333 yuan higher, setting a new record high, and then the stock price fell back to close at 319.01 yuan per share, an increase of 0.52%.
The Securities Times reporter learned that C08M is a power battery that can also be used in the field of energy storage. There is a BYD C08M on sale on the 1688 wholesale website. The merchant confirmed the above price increase news to reporters and said that in addition to the C08M, there is also a C20M that will also increase the price. Most of BYD’s power batteries will not be supplied. The price increase letter involves It is B product, C product and battery for cascade utilization.
“The price of raw materials has risen so much, and the price of batteries will naturally rise. CATL has already risen in the first half of the year, but their outflow products are relatively small, and they don’t know the specific increase.” The above-mentioned merchant said.
As of press time, BYD has not yet responded to the price increase.
According to the tracking statistics of True Lithium Research, the current increase in power battery costs is generally between 30% and 40%, which means that even if the price of batteries rises by 20%, many battery companies will find it difficult to make money this year.
According to preliminary calculations by GGII, the theoretical cost of square iron-lithium batteries rose from 0.33~0.39 yuan/Wh at the beginning of the year to 0.48~0.54 yuan/Wh; the theoretical cost of square power 523 batteries rose from 0.45~0.51 yuan/Wh at the beginning of the year to the present 0.61~0.67 yuan/Wh; the theoretical cost of the corresponding cylindrical ternary 523 battery cell has risen from 0.4~0.46 yuan to the current 0.58~0.64 yuan/Wh.
The squeezed profit margin has been reflected in the semi-annual reports of many companies. In the first half of this year, CATL (300750) power battery system gross profit margin was 23%, down 3.5% year-on-year; Guoxuan Hi-Tech (002074) power lithium battery gross profit margin was 19.27% in the first half year, down 6.09% year-on-year; Funeng Technology (688567) ) The semi-annual report did not disclose the specific gross profit rate, but stated that the gross profit rate of listed companies in the industry has decreased during the period, and the company’s gross profit rate in the first half of the year has dropped more than the industry average, mainly because the supply chain scale effect is not significant, and The Zhenjiang plant is in a ramp-up phase of production capacity. Funeng Technology has a gross profit margin of 9.81% for its power battery system in 2020.
Mo Ke, the founder of True Lithium Research, told reporters that BYD batteries are basically used for their own use and there are currently very few external supplies. Therefore, the price increase will have little substantial impact on the entire electric vehicle market. However, BYD is the leader in batteries and has a great demonstration effect. It is expected that other battery manufacturers will follow up and increase prices.
Price increase is difficult to implement
Power battery factories have recently reported price increases, but the chain of price transmission to the downstream is not smooth.
Two weeks ago, Penghui Energy (300438) also issued a price increase letter. The company listed the increase of main battery materials and decided that all new orders will be subject to large-scale linkage pricing. The increase depends on the proportion of each product material and the increase. The quotation is updated in real time every week, and long-term, waiting-notified orders for material delivery and delivery are not accepted. In addition, it will re-negotiate orders that have not been picked up, and shorten the billing period in an all-round way.
Penghui Energy Securities Department confirmed to the reporter of Securities Times·e Company that the letter is true, but stated that the specific price increase plan needs to be negotiated with specific customers, and not all order price increases can be implemented. At present, most of the company’s products are consumer batteries, and power batteries account for only 20% to 30%. “It should be relatively difficult for OEMs to transmit price increases in the industry.”
Guoxuan Hi-Tech also reported a price adjustment negotiation letter signed on October 18. The company confessed in the letter that as the prices of battery cell raw materials continue to rise, power battery companies are currently facing the biggest difficulty since the new crown epidemic. With the rising prices of cathode materials, electrolyte, copper foil, aluminum foil, etc., the company has tried its best to reduce the impact of rising costs, but with little effect. Therefore, the company plans to conduct a second negotiation on the orders signed by both parties. In response to this letter, the reporter called Guoxuan Hi-Tech for details. The company said it was inconvenient to disclose the details.
In addition, the reporter also learned that Funeng Technology is also considering price increases in the near future. The securities department of the company responded to the reporter that the price adjustment method will be different according to the customer’s situation. Some will adjust according to the price fluctuation of metal raw materials. After more than a year, the issue of price adjustment is still being communicated with downstream customers.”
As OEMs have a strong voice in the industry chain, it is not easy for battery manufacturers to implement price increases. A person in charge of a power battery manufacturer told reporters: “Everyone in the power battery industry is having a miserable life. We have also proposed price increases to the OEMs, but it is difficult to achieve them. The OEMs are too strong and have a price reduction target every year. , So we will ask suppliers to reduce prices. For us, it’s good not to reduce prices. They won’t agree to price increases.”
There has not yet been a price increase trend in the vehicle sales market, except forTeslaRepeated price hikes reveal pressure on the cost side. On October 24th, Tesla’s US official website showed that Tesla increased the price of Model S long-range version and Model X long-range version by $5,000 respectively; Model 3 standard battery life upgraded version, Model Y long-range battery version sold The prices have been raised by $2,000 respectively. Many Tesla models have experienced price increases before. CEO Musk once said that the reason for the price increase is mainly due to the supply chain pressure and raw material costs of the entire industry.