From September 9th to 10th, the 2017 China Automotive Industry Development (TEDA) International Forum was held in Tianjin. At the event, a special dialogue on "Energy Diversification and Strategic Choices for the Automotive Industry" was held, with Dou Ruzhen, Chief Expert of the China Automotive Technology Research Center, delivering a keynote speech.
The following is a transcript of the speech:
Hello everyone, I'd like to give a presentation on key technologies for power battery systems, along with our work and current research. This forum is primarily geared towards the industry. While my slides will include some technical content, I want to focus more on sharing viewpoints, judgments, and perspectives.
The theme of this forum is new business models and new concepts. Judging from the content of the two days of the forum so far, it is richer and more impactful than the reviews of previous years. Concepts and predictions from a few years ago have become reality, and new content has been added. One of the forums in the morning focused on the clash between traditional industries and new entrants, and it was very intense. I won't repeat the specific viewpoints here, but at least it gave me an insight: the transformation between old and new industries presents more challenges to product technology routes and product implementation paths. This differentiation is precisely a very important reason for the transformation between old and new industries.
This is a statistic compiled by the China EV100. Here's a figure I want to share: the industry concentration is getting higher and higher. From the perspective of power battery systems or power batteries, the top ten companies now account for more than 80% of the industry's shipments. Regardless of the specific figures in this statistic, I think everyone can see the rapid development, both from the numbers and from how OEMs choose their suppliers.
This is the current stage of our development in the field of component products, which is in the midst of market development and transformation. Supporting the development of new energy vehicles through components requires more stringent standards than before, with stricter performance and quality requirements, and a faster iteration cycle.
My report covers three parts. First, the requirements for battery systems, which I'll share some perspectives on as I mentioned earlier. Second, based on our practical experience, we'll share our views on the selection of cylindrical technology routes and the corresponding battery system development. Finally, I'll report on the current status of industrial policies. We won't go into detail about the national standards. Currently, from a product perspective, the focus is on both safety and reliability—requirements that components must meet. Specific requirements are also outlined for battery systems and individual battery cells. This actually illustrates, from another perspective, the complex requirements facing our complete vehicle products, especially new energy vehicles, at this stage, which need to be achieved through concrete products and technological approaches. For example, I've listed the requirements for the safety of the battery system in the overall vehicle, but this isn't exhaustive.
These requirements will impose demands on our product design, control strategies, and technical implementation methods. They also raise requirements for subsequent product inspection, manufacturing processes, and production equipment that are completely different from those of traditional automotive manufacturing, traditional electronics, and battery production processes. So, as I mentioned earlier, in the process of industrial transformation, there are opportunities, but the requirements are not being simplified or reduced. It's difficult to say whether it's more difficult or simpler. Therefore, my basic view is that this is a requirement for a Battery Management System (BMS), and we will introduce our approach in the product development roadmap later. We list the battery pack components from a safety perspective. We will also outline the assessment requirements and content, specifying what must be completed and to what extent.
So, regarding the technological roadmap or implementation path we just discussed, from the perspective of industrial development, there are still many uncertainties. On the one hand, this presents opportunities for many new entrants, but on the other hand, it creates uncertainty for traditional automakers, traditional parts suppliers, and new entrants in the car manufacturing or parts supply chain sectors. For example, regarding fuels, since the theme of this conference is energy diversification, our new energy vehicles, including clean fuels, hydrogen fuel cells, and different material systems for power batteries, have not yet reached a consensus on a universally accepted technological path that meets all the requirements, whether it's pure electric, plug-in hybrid, or range-extended electric vehicles.
So, in this area, for example, the lithium iron phosphate battery I just mentioned, including different packaging types—prismatic, cylindrical, or pouch—while the top ten battery companies control 80% of the production capacity in the OEM supply chain, there are actually hundreds of other power battery companies also producing similar products. Therefore, our assessment of future development goals, and the difficulties we face, are actually the background for our technology roadmap selection and development path.
We've chosen a basic technological path for cylindrical power batteries, and we've conducted a comprehensive analysis of this from the perspectives of product, technology, manufacturing, and the entire system's completeness. For example, the advantages and disadvantages of cylindrical power batteries are listed here. Different systems and different packaging methods have their own advantages and disadvantages.
On the other hand, parallel connection can reduce inconsistency, allowing us to provide greater reliability for a larger number of cylindrical batteries. Let me reiterate about the 21700 battery. As you know, the 18650 is a packaging structure inherited from earlier consumer electronics products. This design is widely used in new energy vehicles, notably in Tesla's collaboration with Panasonic, where the 18700 has evolved from the Tesla Model 3.
Especially from a cost perspective—and I want to emphasize that this is one aspect of performance requirements, but also another, safety and cost are issues we must address—we believe that the 21700 battery, or the relatively mature system of cylindrical power batteries, has its advantages. Later, I will also mention recycling, and we may discuss our views, opinions, and judgments on this topic.
As some manufacturers mentioned earlier, EV, including HEV or PHEV, have also made more performance advancements in different applications. These are the three different specifications of Lishen (phonetic).
Returning to what we're doing, Tianjin Qingyuan (phonetic) is collaborating with an American company, PPI, on the design of battery development modules. As mentioned earlier, our starting point is primarily safety, followed by performance and cost. I won't reiterate the other basic performance aspects. From the perspective of industry evolution, I believe the production process is more crucial for ensuring production efficiency and consistency. This is our technological approach to safety. We've achieved a 2-degree Celsius temperature difference control within the battery cells, which is very difficult to achieve, but essential. This is closely related to the overall temperature control within the battery pack. While this might increase costs and reduce energy density, ensuring safety, including the battery lifespan I mentioned, is paramount. This cause-and-effect relationship clearly shows that safety and performance, or from a safety perspective and lifespan perspective, are our top priorities.
Let me add something to the diagram in the upper right corner. Under this premise, we need to reduce costs through technical means, such as more efficient heat dissipation and other technical designs. These are our expected performance requirements. For example, in the lower left diagram, we use honeycomb aluminum to reduce weight, including our control strategies and methods. This is what I mentioned earlier: according to the requirements of the automotive industry, we should have higher requirements for past battery production or battery module production, based on supply chain management requirements. Only in this way can we ensure the safety and reliability of mass-produced products. This is a battery pack we've developed. And as Mr. Li from Geely mentioned earlier, according to the requirements of OEMs, we hope to design and develop modular products for different products.
This is a flowchart of our production process. We hope, or rather, our current design, to further improve production efficiency. For example, the module production line is designed to have a capacity of 160,000 units per year. These are the steps, which I will not go into detail about.
We aim to achieve a production capacity of 100,000 battery packs per year. Only this volume can support our goals, and this is based on the development and verification processes of OEMs at different stages. This is a requirement of the technology roadmap, which I won't go into detail about. What I want to emphasize here is that we hope to ultimately reduce battery costs and meet customer requirements in line with industry developments.
Finally, let's briefly introduce battery recycling, focusing on environmental protection and the essential requirement of resource recyclability. The requirements for recycling in this new energy sector are completely different from those faced by traditional industries. According to current regulations, there are already some published standards, and others are being drafted, planned, and promoted. As an aside, I am also an expert on new energy access in Tianjin. Tianjin pays close attention to battery dismantling and recycling, and the release and evolution of regulations are currently an important aspect of the industry's work, aiming for a completely closed-loop recycling system. These are some recycling methods.
There are many models, including the recycling solution provided by BAIC to a vehicle manufacturer. Many companies are already undertaking related work. This is due to several factors that have influenced our safe disposal efforts. However, it undeniably increases costs for companies, which is a reality we cannot ignore. The China Automotive Technology and Research Center (CATARC) has established a battery recycling alliance to address these challenges and requirements. This concludes my report. Thank you for your brief overview.
