The EU officially issued the "New Battery Law", and Ningde era should
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2023/08/23 15:12:13
Recently, the European Union officially issued the "New Battery Law", which is considered to be the most stringent carbon management policy in the history of power batteries. The new law is based on the governance idea of "full life cycle" carbon management for batteries, starting with the mining and transportation of raw materials for battery commodities, covering production and manufacturing, and going all the way to the full-link carbon emission supervision focusing on recycling. Among them, the requirements for the recycling rate of waste batteries, the utilization rate of recycled materials, carbon footprint, and battery passports are emphasized.
It is particularly noteworthy that the new law also specifically classifies power batteries independently from industrial batteries, which has a great impact on battery companies that account for a relatively high share of the European market.
The new law or will force the battery industry to reshuffle, who will be the biggest winner in this round?
More and more domestic volume, Europe becomes a must?
Overseas markets, especially the European market, play an important role in the Ningde era (300750).
In the recent performance exchange activities of China Daily, Ningde Times said that its overseas market share continued to increase, and the proportion of overseas revenue in the first half of this year reached 35.5%, a significant increase from 23.4% in 2022. SNE data also shows that Ningde Times' overseas market share of power batteries from January to May this year reached 27.3%, an increase of 6.9% over the same period last year, of which 28.9% in May, ranking first for two consecutive months; From January to May, the European power battery market share was 34.5%, an increase of 9.3%; The European market share was 36.8%, ranking first for two consecutive months.
"In the first half of the year, the competition was fierce, but our market share was relatively stable, stable at the world's first level. The domestic share of BYD (002594) is rising, and the domestic share has declined slightly, but overseas growth is stable. Europe is the first, the United States is second, mainly thanks to the past in the overseas first-line car companies fixed point." Ningde times related people said so.
Since last year, affected by the rising prices of upstream raw materials, most of the first and second line power battery manufacturers have suffered a profit decline, and Ningde Era has not been spared, and gross profit margin has almost fallen to the lowest level in history. Although the first half of this year, the Ningde era has generally achieved "increased revenue and increased profits", but last year, the proportion of its power battery installed level fell below 50% for the first time, to 48.2%, and has not returned to 50%.
In general, the report card of Ningde Times in the first half of this year is still good, net profit increased by 153.64%, but the domestic market is more fierce, battery production capacity surplus, Ningde Times domestic market share is being eaten by competitors.
In the first half of the year, the actual capacity of the battery system of the Ningde era was 254GWh, an increase of 65%. However, the actual production of Ningde times increased by only 23% to 154GWh, and the capacity utilization rate has dropped from 81% in the same period last year to 60.5% in the first half of this year. Some of its battery capacity is already in excess.
At home, Ningde Times faces fierce competition from second-line battery companies such as BYD, Zhongchuang Xinhang, and Yiwei Lithium Energy (300014). In particular, BYD's rapid rise is considered to be the main reason for the decline in domestic market share in the Ningde era.
With the rapid growth of sales of new energy vehicle products, BYD has led to a surge in its own power battery installed capacity, and its power battery installed capacity has grown from below 20% for a long time to more than 30%, narrowing the distance with the Ningde era.
In this context, overseas markets are even more significant. In fact, Ningde's overseas business is pressing the accelerator button.
For the strategic arrangement of the European market, Ningde era relevant people said that the capacity layout of Europe is clear and resolute, many Chinese companies are also investing in upstream materials, the EU has also put forward requirements for the industrial chain, localized supply will have an advantage.
Public data show that at present, China has 11 power battery companies in overseas planning capacity layout, has announced 31 projects, planning capacity of 600GWh, a total investment of more than 260 billion yuan. China Power (600482) battery enterprises overseas layout capacity is mostly located in Europe.
The biggest advantage of overseas markets is profit margins. Ningde era relevant people said that the overseas market is still preferred, and it is still in the climbing stage, but in the long run, overseas competitiveness is good, because Europe is willing to pay a premium, and now the production line efficiency and cost will be much better, ensuring reasonable gross profit will be better.
Leverage power, shuffle the deck with a new battery?
In the field of power batteries, car companies and battery giants are likely to compete for final pricing rights. This is also an important factor affecting the performance of Ningde era.
In the context of many second-line power battery manufacturers' commercial low-cost strategy to seize the market, Ningde Times does not seem to be prepared to directly fight a price war, but to strengthen research and development investment, hoping to rebind new energy vehicle companies with new products such as condensed matter batteries, M3P batteries, cost-effective sodium-ion batteries, and high-quality Kirin batteries. For now, a more immediate and realistic competitive strategy may be in carbon reduction.
The European Union's new battery law is harsh on the relevant requirements of carbon reduction targets, taking battery recycling as an example, the new law requires 80% by the end of 2031; The materials involved in battery recycling will recover more than half of lithium resources and more than 90% of cobalt, copper, lead and nickel by 2027. In terms of battery passports, consumers are required to scan the QR code on battery products to quickly obtain the full carbon footprint from raw materials to manufacturing, from chemical composition to technical specifications, from transportation to recycling, supply chain data and many other contents.
As the European car companies that have exhausted their dividends in the era of fossil energy, they are now at the backward level in the battery industry, the core of electric vehicles, from the underlying theory, engineering technology, production capacity and practical experience.
In the period of adjustment and change of the industry pattern, the introduction of every major policy and regulation can be said to be a rare opportunity to overtake a corner. Jiang Li, Secretary of the Board of Directors of Ningde Times, once said, "In the strategy of Ningde Times, zero carbon is a responsibility, a capability, and an opportunity."
Since 2022, Ningde Times has made frequent moves in the field of carbon emission reduction, and made great efforts to enrich ESG work, especially industrial cooperation, and clean technology layout, including circular economy.
With the landing of the new EU battery law, looking back at these experiences, it can be said that the drunk Weng in the Ningde era is not only about wine. Ningde Times clearly wants to play a more dominant role in the entire electric vehicle battery supply chain.
In the first half of this year, Ningde Times released a zero-carbon strategic goal, announcing its commitment to becoming the world's first zero-carbon battery head enterprise. Following the certification of Sichuan Times Yibin Plant as the world's first zero-carbon plant, Times Geely was awarded a carbon neutral certification. In addition, Ningde Times has also participated in the world's first "battery passport" pilot of the Global Battery Alliance, and is the only company in China to participate in this work.
"Battery passport this thing, the first thought is to meet the needs of ESG, and later found that the real purpose is still Powered by CATL or CATL inside, more than expected," an investor commented.
In June this year, Ni Jun, chief manufacturing officer of Ningde Times, said that Ningde Times is already the world's largest recycler of electric vehicle batteries, with the ability to recycle more than 99% of nickel, cobalt and manganese in batteries, and more than 90% of lithium. Catl has invested in battery manufacturing sites in Germany and Hungary, and is working with partners in North America.
In China, Ningde Times is also constantly laying out battery recycling business. At the end of January this year, Ningde Times announced that it intends to invest in the construction of an integrated new material industry project in Foshan, Guangdong Province by its holding subsidiary Guangdong Bangpu. Production is expected to begin in 2027. From the scale of investment, Ningde era is aimed at the domestic battery recycling leader throne. In addition, Ningde Times is working with BASF to advance the positive electrode materials and battery recycling business in Europe.
"On the one hand, the rapidly expanding market, on the other hand, the industrial base is too weak, and suddenly faced with such strict policy requirements, European car companies have almost only one way: cooperation with advanced companies." A person close to the Ningde era believes that the battery as a technology-intensive industry, even if there is a day of capital injection, if there is no practical accumulation, it is just to promote the cooperation must be strong and strong, "the second echelon of enterprises can not reach, BYD despite its huge scale, the product is not an absolute advantage, even not external supply, only the Ningde era is up for sale at this time." Source: Sina Finance
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