On December 18, the national development and reform commission issued the "regulations on the investment management of the automobile industry" (hereinafter referred to as the "regulations"), in addition to raising the production threshold for new pure electric vehicle enterprises, but also put forward higher requirements for the lithium battery industry. Compared with the regulations on automobile industry investment management (draft)(hereinafter referred to as the draft), the regulations does not put forward specific technical indicators for the newly-built lithium battery, but for the expansion projects of the existing lithium battery enterprises, it is clearly pointed out that the capacity utilization rate of the enterprises in the last two years shall be "no less than 80%".

After the paper has high technical standards for new power lithium battery industry caused controversy, despite the cancelled this a harsh "threshold", but in terms of power lithium battery capacity control, the regulations on the basis of the paper, the new capacity utilization of specific indicators, further defined the "examination and approval in advance and strengthen the regulation of things afterwards, standardize the market main body of investment behavior" train of thought.

In addition, the draft guidance for pure electric vehicle enterprises to grasp the key components of the production capacity of the direction has not changed. According to the regulations, the shareholders of new pure electric vehicle enterprise investment projects should have the intellectual property rights and production capacity of key components such as lithium battery for vehicle power. This means that the joint research and development of automobile enterprises and battery manufacturers, and the independent research and development of power lithium battery will become the trend. Both the power lithium battery manufacturers and electric vehicle manufacturers will face more severe assessment and more fierce competition.

1. Cancel "extremely high" technical indicators

"Regulations" cancelled the new power lithium battery investment project technical indicators, making the industry to breathe a sigh of relief. According to the previous draft, the investment project of newly built lithium battery monomer/system for vehicle power should not only meet the relevant national and industrial standards, but also reach the current industry-leading level. To be specific, the power density of the energy-type power lithium battery and the system should be no less than 300 watt-hours/kg and 220 watt-hours/kg respectively, and the quick charging ratio of the power-type power lithium battery and the system should be no less than 8C and 5C respectively. Such standards have caused a stir in the industry. On December 20, a person who is engaged in the research and development of lithium battery materials also told 21st century business herald that the improvement of battery technology contributes the most to battery life.

It is understood that at present, there is not a domestic enterprise's mass production battery can reach 300 watt-hours/kg. Some data shows that the main domestic battery manufacturers this year to promote the battery monomer energy density is basically about 210-230 watt-hours/kg, and the draft regulations are far from. According to the "energy conservation and new energy vehicle technology roadmap" issued by the ministry of industry and information technology, the energy density of BEV lithium battery and PHEV lithium battery by 2020 are 350 watt-hours/kg and 200 watt-hours/kg respectively, which are just close to the technical requirements of the project stipulated in the draft.

Fortunately, the final version of the regulations did not use the above strict technical indicators. For new projects in the field of power lithium battery, enterprises only need to have enough research and development capacity, and assume the responsibility of battery recycling, in terms of technical indicators, "reach the industry-leading level". In other words, the policy of lithium battery power enterprises to take a more open attitude. On the other hand, the regulation weakens the requirements for technical indicators such as energy density and further clarifies the idea that "the market plays a decisive role in the allocation of resources in the automobile industry". In fact, before the publication of the draft opinion, affected by subsidies and other factors, domestic new energy automobile enterprises and battery enterprises have been pursuing higher energy density, higher charging rate of lithium battery power, but also brought many hidden dangers. Reporters learned that this year, there have been more than 40 new energy vehicle fire incidents, although it is difficult to clearly identify the responsibility, but to a certain extent, it reflects that some enterprises in the technology can not meet the requirements of the situation reluctantly apply for subsidies, to product safety and other potential risks.

While the regulations remove restrictions on technical indicators for power lithium batteries, it is also expected in the industry that financial subsidies will be withdrawn around 2020, and energy density and other indicators will also disappear at the policy level. In the long run, it will be up to the market to decide the energy density of lithium-ion batteries and the range of electric cars. That could prove fatal for some battery makers. Wang binggang, a well-known expert on new energy vehicles in China, told 21st century business herald that "the decline of subsidies is a big reshuffle for battery factories. Now the good battery factory is in short supply, the bad nobody wants, some battery factory will probably close down.

It is worth mentioning that at present, South Korea's LG, samsung and Japan's panasonic all have plans or have started battery-related projects in China. As the subsidy policy fades after 2020, domestic battery factories need to compete with foreign manufacturers head on.

2. Strictly control capacity utilization

The draft does not put forward "hard requirements" for the current capacity expansion project of automotive lithium battery, but only requires that the production capacity utilization rate of automotive lithium battery in the last two years is higher than the average level of the whole industry, and there is no quality safety accident in the production and application of the product. However, the final version of the "provisions" clearly requires that the existing power lithium battery expansion projects, the enterprise's capacity utilization rate in the last two years are not less than 80%. This is not a low index for most battery manufacturers. In this case, top enterprises can continue to expand their scale, while some enterprises with low competitiveness will further "lose" their market share. From the perspective of industrial development, strict approval of new power lithium battery projects and control of low-end production capacity are also urgent affairs for the power lithium battery industry. As soon as the draft was released, there were many supportive voices in the industry, arguing that capacity utilization rate should indeed be taken as an important assessment indicator.

An expert who has been observing the field of new energy vehicles for a long time told 21st century business herald that the overinvestment in the past few years and the low level of investment in batteries have resulted in the low utilization rate of many battery factories and the inability to sell batteries. Driven by the development of new energy vehicles, the lithium battery industry has also experienced a massive expansion. The ministry of industry and information technology has approved 56 automobile lithium battery enterprises. According to the data of lithium power industry, the capacity of lithium power battery in China has reached 185GWh in 2017, while the battery output is only 44.5GWh, and the capacity utilization rate of the whole industry is less than 30%.

At present although battery supply of key enterprises, such as in the era of ningde, byd, bick enterprises accelerate the capacity expansion, but beyond that of other power lithium battery enterprises, combined with only about 13% of the market demand, but can occupy about 55% of the total output of industry, and most of them belong to low-end production capacity, the capacity utilization is only 10%.

The same expert also noted that the current number and capacity of enterprises is "certainly too much". "The lithium power battery is a high-tech industry, not everyone build a plant, buy some equipment can produce, need to have a strong research and development strength and capital capacity, production management level is also very high requirements. He believes that the policy of strict control of production capacity can not only guide enterprises to invest rationally, but also promote the survival of the fittest in the industry. "Such [underutilised] battery manufacturers should not expand capacity because they are not competitive enough and it would be more wasteful to continue." A relative of a new power car manufacturer believes that the whole auto industry is capital-intensive and technology-intensive. Under the situation of strictly controlling the expansion of production capacity, the industry competition intensifies and the enterprises involved will do their best to accelerate the formation of oligopoly.

3. Vehicle enterprises enter battery competition

In addition to the internal competition of battery enterprises, vehicle enterprises to join the competition in the battery field will make the industry shuffle more quickly. According to the regulations, the shareholders of new pure electric vehicle enterprise investment projects should have the intellectual property rights and production capacity of key components such as lithium battery for vehicle power. This means that the vehicle enterprises to invest in the development and production of power lithium battery will be the trend. In fact, due to the high concentration of the industry, the head of the lithium battery power enterprises in short supply of products, there have been a lot of car companies and battery manufacturers to launch strategic cooperation, take a stake or joint venture to build factories, improve the stability of the supply of lithium battery power.

On December 20, ningde times and geely jointly announced the establishment of a joint venture company with a registered capital of 1 billion yuan, in which both parties hold 51% and 49% respectively. Previously, ningde times has set up joint ventures with saic, dongfeng and gac, among which saic and gac are "deeply bound" to ningde times. The two parties not only jointly set up a battery system enterprise, but also jointly develop and produce battery cells. Taking saic as an example, the two joint ventures with ningde era are respectively called "saic-era power lithium battery system co., LTD." and "saic-era power lithium battery co., LTD.

At present, most of the cooperation between automobile enterprises and battery enterprises is mainly at the level of battery system. The main consideration of automobile enterprises is to ensure the continuous supply of batteries. However, to extend the cooperation between the two sides to the field of cell upstream is to further attack core technologies, improve the quality of battery supply and win higher autonomy.

For the vehicle enterprises, participating in battery research and development also has the advantages of market perception. Zhu jun, deputy director of saic's passenger vehicle technology center, previously told 21st century business herald that car companies are more sensitive to the market than battery makers. "The next direction the battery should go is different depending on the Angle at which you are standing. In the cell industry, we know what kind of cell is the consumer's favorite and most acceptable. It is worth mentioning that in the new era, saic is not only an "internal supplier" of its own brand, but will radiate to more brands and products, becoming an important part of saic's layout of the whole new energy industry chain. Zhu jun revealed that with the construction and production of the second phase of the plant, Volkswagen and gm will also use the battery cells produced by era saic. In the Chinese market, the battery factory of Volkswagen MEB pure electric platform is in era saic. "We value the industrial chain even more than the product. "My task is to build a new energy industry chain with our technologies, bring in viable partners with our products and services, and create a competitive cloud industry chain that serves the whole of China with our technologies. Zhu jun says.

As the production of new energy vehicles increases in the future, vehicle manufacturers and advanced battery factories will cooperate to jointly develop lithium battery power, which may occupy the mainstream for quite a long time. According to the above expert analysis, battery, as a key core component, is related to the performance, cost and service life of electric vehicles, which largely determines the core competitiveness of electric vehicles. The core competitiveness of a complete vehicle enterprise is determined by whether it can establish battery research and development and production projects independently or jointly.

In his view, with electric cars more popular on a large scale, such as byd oems make battery mode will highlight the very big advantage, or in the future will have more oems into power lithium battery research and development and production, but the regulations are almost completely let go of the battery industry access rules, also provide the opportunity for both incoming. It is not difficult to imagine that the future of the power lithium battery industry will be very busy.