(Original title: Lithium battery runs wildly: Thousands of billions of investment and production expansion plans are thrown out in one month)
“Grabbing scale, grabbing (market) share, and profit is not something to consider at this stage.” In the face of the continued hot wave of lithium battery investment, an executive of a listed company in the industry chain expressed this to reporters.
Entering the fourth quarter, the lithium battery industry chain is still the most dazzling sector in the market. A private equity person bluntly said that there is certainty of growth here, and there is a market prospect of trillions of starting, which is unmatched in the whole market. “The short-term and long-term logic is very clear. Now the huge investment of industry chain companies has filled the gap in the medium-term change.”
According to statistics from Shanghai Securities News, only in the past month, leading A-share lithium battery companies represented by CATL and Yiwei Lithium Energy have announced investment expansion plans totaling 100 billion yuan. Driven by unprecedented industrial investment, the lithium battery sector has once again been sought after by the market and has begun to form a virtuous industry-finance cycle of “financing-investment expansion-stock price rise-continued financing”.
No one can refuse the exponentially inflated “cake”. From terminal car manufacturers, to supply chains such as lithium batteries in the midstream, to raw materials such as lithium mines in the upstream, everyone is struggling to run. When the entire industry chain, as well as the secondary market, and even the primary market are running, then all participants have only one choice-to run faster.
Running: One month investment of 100 billion yuan
“This wave of investment has two characteristics: one is the investment led by leading companies, and the other is the investment in the upstream and downstream extensions of the industrial chain.” In the past one month, the investment scale of 100 billion yuan, CATL and Yiwei Lithium Energy accounted for half of the country.
On October 18th, the lithium battery leader Ningde Times said in response to the fixed increase inquiry letter: “The demand for business development funds is large.” After enumerating a series of capital expenditures such as capacity construction, R&D investment, and company operations, the company believes that, Existing funds cannot meet future development needs, and it is frankly stated that the capital demand for new capacity construction from 2020 to now is as high as 110 billion yuan. Although “the money is not enough to spend”, CATL still announced two more project investment plans on November 5, totaling 15 billion yuan.
In the wave of lithium battery expansion in the past month, the 15 billion yuan of Ningde era can not afford too much splash. According to statistics from the Shanghai Securities News, in the past month alone, more than 10 lithium battery industry chain companies have announced investment expansion plans, with a total investment of up to 100 billion yuan.
For example, on November 5, Yiwei Lithium Energy announced that the company plans to complete a fixed asset investment of 30.521 billion yuan in Jingmen City, requisition about 3000 acres of land, and build a Jingmen Power Energy Storage Battery Industrial Park project with an annual output of 152.61GWh. Yiwei Lithium Energy stated that this move is to better seize the market opportunities of power energy storage batteries, expand the production capacity of power energy storage batteries, and optimize the company’s industrial structure.
“This wave of investment has two characteristics: one is the leading investment by leading enterprises, and the other is the investment in the upstream and downstream extension of the industrial chain.” An insider said.
The trend of leading enterprises to lead investment is relatively obvious. Ningde Times and Yiwei Lithium Energy accounted for half of the investment scale of 100 billion yuan in the past month. The above-mentioned industry insiders stated that lithium batteries are an asset-heavy industry with huge investment. Leading companies have advantages in technology and capital. In the past few years, the market share of several leading companies has continued to increase, which is achieved by large-scale expansion.
The upstream and downstream extension investment of the industrial chain is also the “exclusive” of leading enterprises. On November 8, Shida Shenghua, the leader in lithium battery electrolyte solvents, announced that its wholly-owned subsidiary, Shenghua New Energy, plans to invest in the construction of a 300,000 tons/year electrolyte project with an estimated total investment of 1.6 billion yuan. This is Shi Dashenghua’s first entry into the field of downstream electrolyte production.
This action quickly attracted market attention. A large number of institutional investors flocked to the company’s conference call. In response to investors’ questions, Shi Dashenghua said that the essence of electrolyte is material. Many large-scale electrolyte companies are deploying upstream materials. The “type” electrolyte material supplier is transformed into an electrolyte + material integrated platform service provider.
Race up: can’t let the market go
“As long as it is produced, it can be sold. If we don’t expand production, it is equivalent to handing over the market, which is equivalent to handing over future performance.”
“Now that the track is hot, the cost of investment must be relatively high. If you look at the logic of the cycle, it is obviously absolutely impossible to invest, and depreciation in the future will not be able to bear; if you look at the logic of growth, the current investment represents the future production capacity. If demand can continue to fall short of demand, then production capacity will become profit.” The private equity sources mentioned above told reporters.
After the popularization of knowledge in the last one or two years, the market has consciously converted the penetration rate of new energy vehicles proposed by various countries into the corresponding demand for lithium batteries. For example, a research institution estimates that the penetration rate of new energy vehicles in the United States will reach 50% by 2030, which is equivalent to a 25-fold increase in the new energy vehicle market in 10 years. Expectations for my country are more optimistic. Some organizations believe that my country’s penetration rate of new energy vehicles will reach 35% by 2025.
An industry of such a huge scale and amazing growth rate is regarded as the Internet at the beginning of this century. Therefore, a large number of Internet giants dare to spend tens of billions of dollars to “build cars”; new car-building forces are not afraid to lose money, even if they sell one and lose another, they must seize the market. The downstream grabbing the market regardless of cost will undoubtedly drive the entire industry chain to boil, especially in the most important link in the new energy automobile industry chain-batteries, the heat quickly followed.
“The production capacity is not enough, and it has not been enough.” A related person from a lithium battery industry company told reporters.
Some industry analysts also provided a calculation method, “The penetration rate of new energy vehicles multiplied by the annual sales volume, and then multiplied by the number of kilowatt-hours of bicycle batteries, is the lithium demand for new energy vehicles. Policies, car companies, and research institutions have been increasing demand. The latest ones are from 1400GWh to 1600GWh.”
The demand target means not worrying about selling, and not worrying about selling represents performance. The above-mentioned relevant person analysis said: “As long as we produce it, we can sell it. If we don’t expand production, it is equivalent to handing over the market, which is equivalent to handing over the future performance.”
The above-mentioned private equity sources said that they are accustomed to seeing the market’s pursuit of popular tracks, and it is easy to understand the excitement and helplessness of collective expansion in the upstream and downstream of the industrial chain. “For companies in the industry chain, this is almost a once-in-a-hundred-year opportunity. It has become a fame and fortune. If it fails, it is also something after the tide ebbs. It is too late to think about it.”
Not only are companies in the industry chain running, but off-site funds are also actively entering the market. In the secondary market, the expansion of production can often be sought after by the market, and the fixed increase is also effortless; in the primary market, the organization will even “break the head” for a start-up battery company.
Put it together: midstream challenges are gradually emerging
“Unless the supply of lithium mines is significantly improved, it will seriously affect the profit margins of lithium battery companies.” Some private equity sources believe that almost all the midstream manufacturing industries are “bearing at both ends”, the downstream is under pressure from the terminal, and the upstream is the cost of raw materials.
Running wildly is common in surprise attacks, but rare in long-distance combat. The reason is simple. Long-distance operations require more balanced supply. For the lithium battery industry, it is the upstream resources that determine its power.
Judging from the existing technical routes, despite the existence of new technical routes such as sodium ion, lithium batteries are still the absolute mainstream. However, lithium itself is a rare metal, and whether its mining in the next few years can keep up with the demand for new energy vehicles is one of the key factors in the entire new energy vehicle industry chain from sales to profit.
However, the situation is not optimistic. The Huaxi Securities Research Report believes that the overall increase in global hard rock lithium resources in the next two years is very limited. If the increase in concentrates from the non-market sales of Greenbush Mine is deducted, the raw materials of concentrates that can be provided to global lithium salt processing plants The increase is even more limited, and most lithium salt processing plants will face a shortage of raw materials.
However, another technical route-salt lake lithium extraction has entered the mainstream view. Tibet Mining has disclosed that from a technical point of view, the Zabuye Salt Lake Phase II project has fully borrowed the successful experience of lithium extraction in Qinghai Salt Lake, and selected “salt field evaporation + membrane separation technology + crystal evaporation” to extract lithium in combination with its own resource endowment characteristics. The technical route, which can reduce the total cost of lithium carbonate production after deducting by-products to 24,100 yuan/ton (the production cost of lithium carbonate from Qinghai salt lake is 32,000 yuan/ton to 34,000 yuan/ton), and the product is competitive Will be greatly improved.
“Unless the supply of lithium mines is significantly improved, it will seriously affect the profit margins of lithium battery companies.” The above-mentioned private equity sources believe that almost all the midstream manufacturing industries are “received by both ends”. The downstream is under pressure from the terminal, and the upstream is the cost of raw materials. For example, the midstream of the fuel vehicle industry chain is not so good. The downstream OEMs require annual price reductions, and the prices of raw materials such as upstream steel will follow the market. This is one of the reasons why domestic auto parts manufacturers are rare independent giants. “The upstream of lithium battery companies is still small metals, and their cost pressures need more attention.”
Like fuel vehicles, there is also pressure to cut prices downstream of lithium batteries. At this stage, the sales of new car-making forces are not large, and they are mainly aimed at the high-end market, and losses are acceptable. But as sales continue to increase and the average product price drops, terminal pressure is bound to be transmitted to lithium battery companies.
“It’s very difficult to reduce costs. Now the manufacturing cost of a lithium battery exceeds that of a fuel car.” A car company executive told reporters.
“Don’t worry too much. Lithium battery companies are also exploring new technologies and processes through financing, research and development, and production. Only when the growth industry is running, there are unlimited possibilities.” The above-mentioned industry insider said.
(Edit: Wen Jing)
.