Furthermore, China's whitelist for automotive power battery companies has begun to open to joint ventures with Japanese and South Korean partners. As the world's largest new energy vehicle market, China will see more foreign companies enter the country in the future, leading to a period of accelerated reshuffling in the power battery industry. Therefore, accelerating support for the research and development and industrialization of high-performance power battery technologies is crucial for strengthening and supplementing the new energy vehicle industry chain. This is a key measure for my country to build an advanced power battery industry cluster and achieve a "leapfrog development."
(I) China, Japan and South Korea lead the world in power battery technology.
Power batteries are a core component of new energy vehicles, and China, South Korea, and Japan have become global leaders in the field. In 2017, global power battery shipments reached 62.35 GWh, with companies from China, Japan, and South Korea accounting for the top ten in global power battery sales, representing 80% of the global market share. Among the top ten companies, seven are from China, including CATL and BYD; two are from South Korea, LG Chem and Samsung SDI; and one is from Japan, Panasonic.
Japan and South Korea have certain advantages in power battery technology research and development and manufacturing processes, while China boasts the world's most complete power battery industry chain. In 2017, China's new energy vehicle production reached 777,000 units, accounting for half of global sales. In the future, Chinese companies will gradually expand from the domestic market to the international market, while Japanese and South Korean companies will further focus on the Chinese market, making China the main battleground for global power battery competition.
From a development perspective, future automotive power battery technology will move towards higher energy density, longer cycle life, and greater safety. Power battery manufacturers must first improve the specific energy of power batteries to compete with gasoline vehicles; battery performance needs further improvement. It is estimated that a specific energy of 300 Wh/kg is needed to meet the usage requirements of various types of passenger cars. Furthermore, power batteries also suffer from insufficient system lifespan, requiring replacement after approximately 5-8 years. Battery safety is also a concern, with incidents of electric vehicle explosions and fires highlighting these issues.
(II) my country's power battery industry suffers from structural overcapacity.
Data shows that in 2017, the national power battery production capacity was 180 GWh, with a capacity utilization rate of only 40%. The domestic power battery industry has experienced a certain degree of overcapacity. Some products are positioned at the low end, resulting in fierce price competition. Some companies have experienced product stagnation, crises, or even bankruptcy.
According to the China Automotive Technology and Research Center, the number of power battery manufacturers in 2017 was less than 100, a decrease of 33% compared to 2016. Among them, the number of lithium iron phosphate battery manufacturers decreased by about 50% year-on-year.
However, the high-performance power battery market is experiencing a supply shortage. Although key companies such as CATL and BYD have capacity utilization rates of over 80%, signs of structural overcapacity have emerged in my country's power battery industry, with a clear polarization.
In recent years, key technologies such as battery materials, individual cells, and battery systems have developed rapidly, and power battery technology has accelerated its iteration, driving the development of automotive power batteries towards greater safety, longer lifespan, and faster charging speeds.
Currently, ternary lithium battery technology is in the mainstream position, while solid-state batteries, fuel cells and other power battery technologies are in the critical stage of research and development. Emerging technologies such as graphene batteries, solid-state lithium batteries, hydrogen fuel cells, and aluminum-air batteries have the potential to disrupt the future power battery industry landscape.
In the international market, power battery companies such as Panasonic, LG Chem, and Samsung SDI have formed industry alliances with well-known automakers such as Tesla, Renault, and BMW. While ternary lithium batteries are gradually becoming the mainstream technology, only a few domestic manufacturers have the capability to supply ternary lithium batteries, and the performance and consistency of their products need improvement. The R&D and production capabilities of power batteries also need to be enhanced. Compared with international advanced levels, domestic battery companies lag behind in both technological R&D and industrialization, resulting in a relatively insufficient supply of high-performance power battery products.
In recent years, influenced by policies such as government subsidies and purchase tax exemptions, the new energy vehicle industry has experienced explosive growth, attracting substantial capital investment, particularly in the battery sector. However, due to a lack of understanding of power batteries and the new energy vehicle industry among some companies (including private capital), insufficient technological reserves, and a pursuit of early production and economies of scale, a significant proportion of production capacity has been allocated to low- and mid-range products. Furthermore, factors such as incomplete power battery technical standards, low automation levels in production equipment, and relatively low production process levels in the past two years have resulted in some low-end products failing to meet the technical standards required for the promotion of new energy vehicles.
(III) Give full play to the leading role of key enterprises in the collaborative innovation system, break through key common technologies, and explore new paths for power battery technology.
First, strengthen the national innovation capacity of power batteries. Further improve the operational mechanism of the National Power Battery Innovation Center, refine the equity structure and corporate governance structure of the company, and focus on enhancing the market decision-making position of leading battery companies within the "company + alliance" framework. This will better leverage the market role of battery companies and address industry technological bottlenecks in battery materials, single cells, and battery systems. Vigorously build provincial and municipal-level power battery innovation centers. It is recommended that battery companies such as CATL, BYD, Guoxuan High-Tech, and Tianjin Lishen serve as the backbone, integrating the resources of research institutes, further expanding openness and attracting international companies to join. This will form a platform focused on the R&D, transfer, and initial commercialization of key common technologies, conducting research on key common and forward-looking technologies, as well as intellectual property layout and reserves. It will also establish an open platform for power battery technology integration and R&D, exploring new paths for automotive power battery technology.
Second, we will increase support for theoretical research and technological development of power batteries. In conjunction with relevant plans for new energy vehicles and new battery materials, we will clarify key technologies and priority areas for power batteries, and increase research on related theories and core technologies of power batteries through major national science and technology projects such as the "National Key R&D Program" and the National Natural Science Foundation of China; we will guide industrial transformation and upgrading funds and various special funds for industrial development to focus on supporting the R&D of power batteries; and we will guide local governments to shift their support policies for the new energy vehicle industry, focusing on increasing investment in key technologies such as power batteries, moving beyond the promotion and application stage.
(iv) Give full play to the regulatory role of industrial policies, strengthen fiscal and financial guidance, and support the industrialization of high-performance power batteries.
First, leverage the guiding role of industrial policies to support the application of high-performance battery products. In conjunction with the whitelist work for the automotive power battery industry, and considering factors such as cell energy density, performance parameters, cell type, and product safety, establish and form a brand mechanism for automotive power battery companies to encourage downstream vehicle manufacturers to integrate and use them. For example, improve the "Parallel Management Measures for Average Fuel Consumption and New Energy Vehicle Credits of Passenger Vehicle Enterprises," correspondingly increasing the credit value of related products to guide the large-scale application of high-performance battery products in the automotive industry.
Second, we will support the industrialization of high-performance batteries through the integration of industry and finance. We will strengthen cooperation between the automotive industry regulatory authorities and financial and other relevant departments to formulate differentiated financial policies, support financing and investment to prioritize the battery industry's whitelist, and control loan amounts for new power battery projects that do not meet national standards and industry trends.
Third, we will continue to increase financial support for the application and promotion of high-performance power batteries. Combining battery energy density and energy consumption coefficient, we will gradually raise the energy density threshold requirements for power battery systems, encourage the application of high-performance power batteries, and promote the achievement of the main goals outlined in the "Action Plan for Promoting the Development of the Automotive Power Battery Industry" by 2020, such as achieving a specific energy of over 300 Wh/kg for single new lithium-ion power battery cells and striving for a specific energy of 260 Wh/kg for the entire system.
Fourth, we will innovate the investment model for the industrialization of power batteries. We will support local governments in establishing guidance funds and utilize market mechanisms to attract social capital to establish an automotive power battery industry development fund to support the industrialization of power battery technology.
