Under the outbreak, the test of electric vehicles on the upstream and downstream industrial chain is much greater than that of fuel vehicles. Many individuals or businesses are thinking about what posture to take to get through this crisis.

Currently, China-EU policy has shown incentives for electric vehicles to support markets that have been held back by the epidemic. How should the car companies in the center of the whirlpool deal with the crisis, and what are the urgent needs of help?

More cruel is that the crisis will accelerate the electric vehicle industry chain upstream and downstream enterprises reshuffle. Only by taking the initiative can we seize the opportunity in this crisis.

Before the outbreak, given the arrival of the subsidy policy, car companies in the promotion of electric vehicles to consider whether the new car on the three power on the cost or experience of the bright spot, the supply chain in the quality, cost and timeliness of parts supply is guaranteed.

After the outbreak, due to the impact of demand, and the sharp decline in revenue, car companies on the new car launch can achieve the effect of more long-term expectations. In this case, car companies will only be more stringent on the product itself and supply safety requirements for core components such as batteries, and eliminate uncertain factors as much as possible. They are more inclined to sound development and business strategies, prepare in the supply chain, and turn "danger" into "opportunity".

Choosing suppliers with safe capital chain, rich supporting experience, product strength, and sustainable development potential, car companies can avoid delays in the electrification process, and at the same time get high-quality parts, and gain more in the compressed electric vehicle market. Initiative.

McKinsey believes that car companies need to assess whether their capital chain can withstand the limit (such as a 25% market decline for three consecutive months). Battery factories with unsafe capital chains will drag down the production and marketing process of car companies, and even bring the risk of supply interruption.

The risk of supply safety before the outbreak was a lack of capacity, such as Audi, Jaguar Land Rover and Mercedes-Benz, which were forced to cut production due to a shortage of LG Chemical batteries. In response, car companies are looking for local battery factories with production capacity in major markets around the world, and have signed supply agreements with 2-3 battery factories to avoid delaying the launch of their new cars due to insufficient production capacity in battery factories.

And the epidemic has led to new variables. The economic downturn caused by the outbreak has brought unknown challenges to the business and finances of enterprises. Power battery enterprises have been slow to return, weak profits, coupled with the outbreak caused by the shutdown, the car market sales are sluggish, the lack of financial support of small and medium-sized battery factories are more prone to the risk of capital chain rupture.

Ma Xiaoli, deputy secretary-general of the China Automotive Power Battery Industry Innovation Alliance, believes that the new coronary pneumonia epidemic has the greatest impact on small and medium-sized power battery enterprises, some of which may face the risk of bankruptcy.

In fact, even in the era of Ningde, a leading company, net profit attributable to the epidemic fell 29.1 percent year-on-year in the first quarter. However, after years of development, it has established a stable capital chain foundation and has more anti-risk ability than small and medium-sized enterprises.

Ningde era essentially represents an international battery factory with long-term accumulation and stable customers. At present, at least the battery manufacturers that have entered the TOP5 global power battery shipments can rely on continuous and stable cooperation with car companies to ensure the sustainability of the business itself, and accumulate rich supporting experience and product strength. Become the most reliable teammate of car companies.

According to SNE statistics, in the past five years (2015-2019), products from Ningde Times, Panasonic, BYD, LG Chemical and Vision AESC have been widely used in the models of international car companies, with global shipments entering the TOP5 list.

Among Chinese battery manufacturers, only the power batteries of Ningde era and Vision AESC are matched with a large number of international mainstream models. Ningde era cooperates with BMW, Daimler, Jaguar Land Rover, Hyundai, Volkswagen, Volvo, Toyota and other international car companies. Vision AESC power battery has been applied to Nissan Leaf for 10 years, with a total of 500000 vehicles.

These car companies cooperate and data show that,TOP5 battery manufacturers have not only withstood the test of the market for many years, but also passed the verification of the international car company system to meet the dual security of supply-reliable product quality and low supply risk.

Moreover, electrochemistry is a process that requires long-term accumulation, and only through the iteration of many generations of products can battery manufacturers clearly define the boundaries of the chemical system. Behind this is a rigorous R & D testing system, a complete product validation cycle and years of process technology accumulation.

TOP5 battery manufacturers have basically completed the iteration of multi-generation products. The square cell of Ningde era has gone to NCM811 and introduced CTP technology from the perspective of process innovation. Vision AESC power battery adopts laminated soft package process, has successfully completed the development and application of 4 generations of products, and officially released a new generation of Gen5-811 AIoT power battery products in 2019.

In the electric vehicle market where the growth space is compressed, the continuous iteration of battery technology will be a great weapon when the car companies compete. The close cooperation between global TOP5 battery manufacturers such as Ningde Times, LG Chemical and Vision AESC and BMW, GM and Nissan is not only the timely and reliable delivery of battery products, but also the creation of future advantages.

The technology iteration needs financial support, which once again explains the importance of stable customers and orders to the sustainable development of battery manufacturers.

With the gradual development of the electric planning of automobile enterprises, the cooperation of industrial chain has increased significantly, and the deep cooperation and binding between vehicle manufacturers and suppliers, the head automobile enterprises are more inclined to choose suppliers with global advantages to reduce investment and cost. After the epidemic, this tendency will become more pronounced. In particular, battery manufacturers that have built production capacity in major global markets will be the focus of car companies.

The outbreak has led to a sharp drop in revenue for car companies and battery manufacturers, and investment in battery capacity will be more prudent. If a new factory is built, whether it is a joint venture or self-made, it will test the capital and management of the enterprise. Battery manufacturers whose production capacity has been completed do not need to consider the financial problems of special periods, and can quickly respond to the needs of car companies to arrange production.

Battery manufacturers with factories around the world can supply batteries to global models of car companies. Only two domestic companies have production capacity in major global markets, one is Ningde Times and the other is Vision AESC.

Ningde era production base concentrated in the domestic, Fujian Ningde, Qinghai Xining, Jiangsu Liyang and other places put into production capacity has reached 58GWh. In 2018, it began to build a factory in Germany and is expected to start production in 2021 to supply international car companies such as BMW and Volkswagen.

Vision AESC's factories are located in Kanagawa, Japan, Sunderland, UK and Smyrna, USA, with production capacity of 2.6GWh,1.9GWh and 3.0GWh respectively. In the future, it will also plan to expand its production capacity in Europe.

For now, the impact of the epidemic on Europe will last longer, and the domestic auto industry is back on track. This also means that the capacity supply in China will affect the shipments of battery manufacturers for a long time. Not to mention, the Chinese market has always been the most competitive market for electric vehicles.

LG Chemical is making a comeback, investing in 7.3 billion expansion of Nanjing battery production line to cope with the surge in battery demand and expand its influence. Vision AESC's China factory will be launched in the middle of the year. Its new generation of high energy density products is expected to be officially put into mass production in Wuxi factory by the end of 2020, after which the global production base will realize mass production simultaneously.

Global production capacity is the key for domestic battery factories to enter the supply chain of international car companies, and it is also the key to supply electric vehicles produced by car companies in the global market based on modular platforms. Modular platforms and unified battery products can help car companies and battery manufacturers reduce technology development costs and reduce production costs through economies of scale.

The future of cost reduction is in the realization of the full life value of the battery, ladder utilization is on the one hand, on the other hand, electric vehicles participate in the auxiliary services of the grid, through the synergy with the grid to achieve the additional value of the battery during the car.

Ningde Times and Huawei have reached a cooperation on the digital transformation of the battery industry chain, and Vision AESC uses AIoT technology to unlock the full life cycle value of power batteries and tap the potential value of power batteries.

For the car market, the outbreak is a big blow. Its warning cannot be ignored: a robust supply chain is essential.

Among them, the severely impacted car companies will inevitably strengthen their risk assessment of suppliers and choose battery manufacturers that can fight with them and overcome the difficulties together. International battery manufacturers with reliable, timely and safe supply will become the strongest teammates of car companies on the tortuous development of electric vehicles.

Source: The NE Era