At the “2018 First International Conference on New Energy Vehicles and Power Batteries (CIBF Shenzhen)” held in Shenzhen recently, Long Huijin, Chairman of Tafel New Energy Technology Co., Ltd., and Huang Yonghui, Marketing Director, gave exclusive interviews to Battery China Network, sharing their views on hot issues such as the development of the power battery industry, battery lifespan, and corporate market strategies.
A global energy revolution is imminent, and the power battery market has unlimited potential.
"A global energy revolution is about to erupt, possibly in the 'moment' of a shift in consumer mindset!" Long Huijin stated. Energy storage relies on batteries, new energy vehicles rely on batteries, and batteries play a crucial role in the energy revolution. The earliest new energy vehicles were electric vehicles, and the smartphone revolution was also driven by the lightweighting of batteries.
He pointed out that in the current energy structure, clean energy accounts for 2.8%, and this proportion will exceed 30% by 2030. Currently, solar, wind, and hydropower generation methods are mature and inexpensive, but the seasonality and time-dependent nature of power generation must be considered, requiring energy storage systems for storage and grid transmission to users. "If battery standards can be standardized, the first step in the energy revolution will be initiated."
The arrival of the energy revolution will inevitably lead to a massive boom in the new energy vehicle and power battery markets. Long Huijin believes that the power battery market is only just beginning, and its future scale will be at least in the hundreds of billions or even trillions of yuan. Even the top giants' battery sales share is not large relative to the overall market. Because of current government energy subsidies, the overall industry landscape is still unclear. "Future market competition will definitely become increasingly fierce. Ultimately, what will attract consumers are competitive companies, not who enters the market first and has a strategic advantage. Latecomers have their advantages; they can improve their competitiveness through technology and cost-effectiveness."
By eradicating the persistent problem of battery cell capacity degradation, the lifespan of power batteries may become "customizable".
Many people are currently concerned about battery life. Typically, the lifespan of electric bicycle batteries is 2-3 years, that of new energy vehicle batteries is 5-8 years, and that of energy storage batteries is 10-20 years. However, Long Huijin believes that the lifespan of power batteries can be much longer.
Long Huijin explained that Tafel has established a battery life prediction model and tested battery life. He further explained that a 120Ah ternary lithium battery can achieve a cell energy density of 210Wh/kg. If the energy density is reduced, it can still retain 80% of its capacity after 2500 to 3000 cycles, meaning the battery can last for about eight years. A 120Ah lithium iron phosphate battery still retains 70% of its capacity after 7000 cycles. If used in energy storage or low-speed electric vehicles, it can retain about 60% of its capacity after 10,000 cycles.
Long Huijin pointed out that the reduction of active lithium is the fundamental reason for the capacity decay of battery cells. Based on research on the mechanism of battery life decay, Tafel has developed corresponding material systems targeting the positive electrode, negative electrode, and electrolyte. By controlling lithium ions, they have achieved a lifespan of more than ten years for power batteries, and after secondary use, the lifespan can reach twenty to thirty years or even longer. Therefore, according to Long Huijin, the lifespan of power batteries will be further extended in the future, and batteries with customized lifespans may emerge, which would be a boon to the entire battery industry. In addition, Tafel has designed an overcharge protection device in its ternary lithium battery system, ensuring the safety and long lifespan of the cells through optimization of the chemical system and mechanical structure.
Long Huijin stated that long battery life is Tafel's strength. Doubling battery life could potentially halve costs. This approach of reducing costs by extending battery life is more worthy of promotion by battery companies. Furthermore, if long-life batteries are well-developed, they may have a greater advantage in secondary use. He also noted that secondary use of batteries involves numerous fields such as electric vehicles, energy storage, base stations, battery recycling, and battery production. It requires not only innovation in business models but also responsible companies to drive it forward, and even the cooperation of the entire industry chain.
Regarding the rising raw material prices in recent years, Huang Yonghui told Battery China Network that several factors are squeezing battery companies' profit margins: national policy requires battery companies to reduce costs to 1 yuan/Wh by 2020, subsidies for new energy vehicles are gradually being phased out, and raw material prices continue to rise. The government's higher requirements for battery energy density have led to many lithium battery companies having large inventories. These companies are selling their inventory at low prices, directly impacting market prices. The decline in battery prices further reduces battery companies' profits. Huang Yonghui believes that the rising raw material prices are a short-term phenomenon caused by speculation in the domestic market, and that based on current market demand, materials are not in short supply.
Huang Yonghui also explained that while the cost of materials accounts for 40% of the battery's price, the remaining 40% is manufacturing cost, resulting in a higher overall price. Furthermore, lithium battery production line costs are generally amortized over five years. Upgrading the lithium battery production line has rendered previously purchased equipment obsolete, further increasing the company's costs.
Win-win cooperation and optimization of industrial ecosystem
When discussing enterprise development, Long Huijin believes that cooperation between battery companies and car manufacturers should rely on product leadership, focus on product quality and technology, and cooperate with car manufacturers with the highest cost performance. Battery companies should work together to develop the next generation of new products.
Huang Yonghui also stated that Tafel's cooperation with top international automakers is based on the automakers' recognition of Tafel's technology and values. At the same time, Tafel also collaborates with internationally renowned consulting firms, enabling them to issue third-party testing reports and exert influence on European and American companies through their reach.
Huang Yonghui explained that Tafel's current business model differs from the past, involving deeper collaborations and the establishment of third-party companies in partnership with operators and vehicle manufacturers. Simultaneously, Tafel is extending its supply chain, coordinating key links in the battery industry chain, such as battery materials, battery production, and secondary utilization, to maximize the value of batteries. This approach not only reduces company costs but also addresses the pain point raised by customers regarding the high price of good batteries.
According to Huang Yonghui, Tafel currently focuses on the new energy passenger vehicle sector, while also venturing into the specialized vehicle market, including heavy-duty trucks. In addition to these two automotive markets, it also operates in the energy storage market. Regarding future market competition, Huang Yonghui stated that Tafel's market strategy emphasizes developing niche markets and optimizing the industrial ecosystem. This approach ensures the company's survival while simultaneously enhancing its influence within the industry.
Regarding future production line layout, Long Huijin revealed to Battery China Network that Tafel's research and development of high-energy-density batteries is primarily focused on an energy density of 300Wh/kg. Therefore, they are collaborating with universities and material suppliers on areas such as 811 cathode materials. Mass production of 811 products with an energy density exceeding 240Wh/kg is expected to commence in early 2019.
