Starting in October 2015, most new energy vehicle manufacturers worldwide shifted their product focus from traditional nickel and cobalt to ternary precursors.
What does this mean for the entire industry? Why are ternary lithium batteries playing an increasingly important role in new energy vehicles? What are the trump cards and core strengths of the new energy industry? Several industry insiders visited the CCTV Finance Channel's "Dialogue" program studio for in-depth analysis!
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Yang Zhao, Public Relations Director of BYD Auto: Currently, domestic new energy vehicles mainly use two types of power batteries: lithium iron phosphate and ternary lithium batteries. This year, we are using 523 nickel-cobalt-manganese material, and in the future, we will use 622 nickel-cobalt-manganese material. This raw material is a very important cathode material in power batteries. The entire new energy industry has a very large demand for ternary lithium power batteries, and correspondingly, a very large demand for ternary materials.
Professor Su Yuefeng of the School of Materials Science and Engineering at Beijing Institute of Technology stated in the "Dialogue" program that there are currently 10 domestic manufacturers producing cathode materials, and the first phase of this project has a production capacity of 40,000 tons per year. "From the perspective of a single company, this volume is probably the largest in China and globally. Their planned production capacity is mainly for ternary batteries, which will generate a huge demand for nickel and cobalt. Therefore, this project plays a very important role in ensuring a stable supply of ternary materials (or a stable supply of nickel and cobalt resources) in China in the future."
Unveiling the trump cards and trump cards leading the new energy industry
Zong Shaoxing, Party Secretary and Chairman of MCC Ruimu New Energy Technology Co., Ltd., said that the key issue restricting the development of the entire new energy vehicle industry is raw materials. Therefore, solving the raw material sourcing problem overseas has become a significant advantage. "The three elements that make up the raw materials are nickel, cobalt, and manganese, which means we have a technological advantage. In fact, we have developed a customized short-process technology specifically for the raw materials from Papua New Guinea. Compared with other domestic competitors, our process flow is shorter, which means that the cost of our products will be lower in the future."
Zhang Yang, the technical head of the MCC New Materials project, told us that there are two major differences between the two domestic counterparts and the reason why the ternary precursor was manufactured in the Caofeidian New Materials project.
Firstly, regarding the raw materials we use, we refine them directly to ternary precursors in one step, unlike our domestic counterparts who first produce a smelting-grade product and then proceed to battery-grade products. This single step eliminates evaporation, concentration, crystallization, and reverse dissolution. The smelting cost per ton of metallic nickel is reduced by at least 2000 RMB. Such an approach would result in a longer supply chain, higher investment, and more complex processes. Only companies with the capability can undertake this, and we have that capability—that's the first reason.
The second reason is that we are doing this project in Caofeidian, which focuses on low cost. Typically, nickel-cobalt smelting involves very high extraction costs and generates a large amount of wastewater. Our new materials project in Caofeidian involves process optimization. Wastewater and acid/alkali consumption are reduced to only half that of the traditional smelting industry. This saves at least 5,000 yuan in smelting costs per ton of metallic nickel.
This is a cost-saving measure achieved through fundamental design optimization, which is undoubtedly a significant advantage in the market.
Will the world's third-largest cobalt producer be born here?
The prospects for both production and the market for this crucial component of new energy vehicle batteries are very promising, said Zong Shaoxing, Party Secretary and Chairman of MCC Ruimu New Energy Technology Co., Ltd. He added that the world's third-largest cobalt producer will emerge here in the future. "We are also planning to double the capacity of our Papua New Guinea project based on market demand, which is the second phase of the project. We are currently carrying out preliminary work, and we hope that the second phase expansion can be completed as soon as possible. Once completed, our annual nickel supply capacity from the Papua New Guinea mine will increase from the current 35,000 tons to approximately 68,000 to 70,000 tons, and our cobalt supply capacity will increase from the current 34,000 tons to approximately 68,000 tons. If we reach 68,000 tons, our cobalt production in Papua New Guinea should rank among the top three in the world."
Will the cost of new energy vehicles undergo a dramatic change in the future?
Zong Shaoxing, Party Secretary and Chairman of MCC Ruimu New Energy Technology Co., Ltd., believes that according to the overall construction plan, the groundbreaking ceremony was held on October 22, 2017, and the first batch of products will be available by the end of this year (2018).
When asked about the impact of the first batch of products on the domestic new energy market and the entire industry chain, experts responded that, firstly, it can address the huge gap in the domestic market's demand for high-performance ternary batteries. Secondly, it can help reduce the cost of ternary materials or cathode materials, ultimately playing a crucial role in controlling the overall cost of electric vehicles.
Will new energy vehicle prices drop? Yang Zhao, public relations director of BYD Auto, told us that the cost accounting of electric vehicles is not simply about the price of cathode materials. Of course, changes in the cost of these raw materials are also very important.
Will the driving range of new energy vehicles improve? Yang Zhao said that from the 333 nickel-cobalt-manganese material used before, to the 523 nickel-cobalt-manganese material mainly used in major industries this year, and the 622 nickel-cobalt-manganese material next year, there should be a great opportunity for installation. Correspondingly, the energy density and driving range of the battery will be improved accordingly. This year, the comprehensive driving range of electric vehicles has generally exceeded 400 kilometers, which can fully meet the needs of ordinary consumers, and even some operating users such as ride-hailing and taxi drivers.
