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LG chemistry vs Ningde era: the history of the second generation of rich scholars

via:博客园     time:2020/9/17 18:01:07     readed:426

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Wen / Xu qinpei

Source: Yuanchuan Technology Review (ID: kechuangych)

In the first half of 2020, the global throne of Ningde era was robbed.

According to the latest data from sneresearch, a market research organization in South Korea, LG Chemical ranked first in the global automotive power battery market with 24.6% market share in the first half of this year, beating Ningde times and Panasonic.

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As the industry that controls the heart of new energy vehicles, the competition of global power battery pattern industry is no less wonderful than that of automobile manufacturers. LG Chemical was still the fourth in the same period last year. Why did it win the title today?

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According to the installed capacity, the top three power batteries are LG Chemical, Ningde times and Panasonic. From the perspective of the founder's background, Ningde era has a strong physical and electronic background. Panasonic borrowed from Sanyo Electric to get on the power battery track. LG Chemical is the only battery enterprise based on chemical background among the global power battery enterprises.

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The power battery loaded on the electric vehicle itself is a chemical product, involving materials and cells. Before setting foot in power battery, LG Chemical was a world-famous chemical manufacturing enterprise, and Xueba background brought two obvious advantagesIt has a solid foundation and convenient integration of industrial chain.

If we split the power battery industry chain, we will find that the upstream is mineral raw materials, and the midstream includes the assembly of positive and negative electrode materials, diaphragm and electrolyte into single cell cells and the development of BMS system, while the downstream product is the overall power battery system, which supplies new energy vehicles. The upstream raw materials play an important role in the whole industry chain.

From the cost structure of the battery, materials account for 70% of the whole battery, and the artificial water and electricity and depreciation are only 20% and 10%.Due to the high proportion of material cost, if the price of upstream raw materials rises sharply, the gross profit rate of battery will be compressed. Whoever controls the upstream raw materials has the right to price.

In terms of upstream raw materials, LG Chemical materials plate itself covers lithium, nickel and other basic materials required for power batteries. The company can contact more suppliers and choose joint venture, investment and purchase methods for layout.

In November 2017, Pilbara minerals, an Australian lithium miner, announced that it would jointly build a lithium processing plant in Korea with LG Chemical. In terms of nickel ore, LG Chemical announced on November 8, 2017 that the company invested 1 billion won (about 897000 US dollars) in Kemco,

There is a mine at home, and I'm still buying and buying.

At the same time, the chemical manufacturing background is also conducive to the construction of a more mature supply chain in the middle reaches (cathode materials, membrane, electrolyte) and other chemical related fields.

With its unique background of chemical manufacturing background, multi-party layout in the upstream, midstream and downstream is conducive to industrial integration and quality control of supply chain.

动力电池产业链示意图

Schematic diagram of power battery industry chain

In addition, LG Chemical has technical reserves in the four key material fields of battery cathode, anode, electrolyte and diaphragm. Li battery has been developed since 1995. According to the distribution of lithium battery patents, it is 19% in the global patent database, leading Panasonic, Ningde and other competitors [2].

Good chemistryThere is a good example of the advantages of industrial chain optimization: in TeslaModel3In the carNCM811The energy density of cylindrical battery ranks first in the world[1]

In addition, LG Chemical is a global soft package giant, accounting for about 16% of the global market. When Panasonic and other giants are developing square and cylindrical batteries, LG Chemical chose soft package battery. Its soft package route is not easy to explode when the battery has hidden trouble, and its safety performance is higher, which has gradually attracted the attention of automobile enterprises.

In the European and American markets, Renault Zoe, Audi e-tron, Hyundai konaev, Peugeot e2008, Chevrolet bolt and other popular models are equipped with soft pack batteries of LG Chemical.

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The power battery industry has three characteristics:High technology threshold, high capital investment and rapid development of the industry.As a result, if you want to do well in this industry, you have to make friends with time until the end.

There are many production procedures, high consistency requirements and difficult coordination between supply and demand. It took Samsung SDI two years to increase the number of process control points from 2000 to 3163.

This involves the knowledge problem in precision manufacturing. Even if the same materials, different formulations and different processes can bring different results. In this case, it can only be continuously tested and accumulated.

If the knowhow accumulation in production process is the core, then R & D investment, R & D personnel and patent number are the key to realize process accumulation. Research and development costs and labor costs are only one aspect, production equipment, product development and design, mold development and so on need capital investment.

Bosch, the world's largest auto parts giant, also wanted to produce batteries. It found that 20 billion euro investment was needed to reach the production scale of 100GWh. After weighing the risk benefits, Bosch finally chose to withdraw.

The second largest multinational company in South Korea, Samsung chemical group, is the second largest in terms of revenue after LG's parent company of 100 billion US dollars. Around 2010, the company began to lay out the power battery business and set up joint ventures in Korea, China and Europe for follow-upPrepare for capacity expansion

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LG Chemical's operation accurately grasped the tide node of electrification. During this period, it is on the eve of the outbreak of the global new energy market, and the penetration rate has steadily increased, but the overall penetration rate is less than 1%. Since then, after 2015, the global new energy market has seen a periodic growth peak, which mainly depends on the rise of China's market.

In 2015, China surpassed the United States to become the world's largest new energy market for the first time.The Ningde era of deepening the domestic market followedtwo thousand and eighteenIn 1997, Matsushita became the world's largest brother.At this time, LG Chemical could only be around the third and fifth place, but it arranged troops in advance, laying the groundwork for the subsequent higher position.

In recent years, the capital expenditure of LG Group has been focused on LG Chemical. At present, LG Chemical and Ningde times are the two largest capacity planning, and the most radical expansion. In addition, in terms of the number of R & D personnel, the two companies are equally matched, both between 5000 and 6000.

With a good family background, we are ready for the work of smashing people and money. The downstream of power battery is the vehicle factory. The next step is to see the shipment volume of automobile enterprises.

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There are three global new energy markets: China, the United States and Europe. The United States started the earliest and the most active, and China's market was the largest. Compared with Europe, it has been tepid. little does one thinktwo thousand and twentyIn the first half of the year, the speed of electrification in Europe increased rapidly.

This year, due to the increase of new energy subsidies, the centralized listing of several pure electric vehicles and other reasons, European electrification ushered in explosive growth. Sales of new energy vehicles in Europe increased by 52% to 403300 vehicles. According to the data of China Automobile Association, in the first half of this year, domestic sales of new energy vehicles fell by 44% year-on-year to 335000 vehicles.

This is the first time in five years that European electric vehicle sales have overtaken China and become the world's largest electric vehicle market.

Under this, LG Chemical's customer structure, which has been operating for many years, has come into play: globalization, multi-point layout, waiting for the full harvest.

Power battery has a complex customer certification process, the whole process basically takes 2-3 years, and because of the complexity of certification, it is not easy for car companies to select suppliers to replace, and it is even more difficult for new enterprises to enter this industry.

As early as 2009, LG Chemical reached a strategic cooperation relationship with Hyundai Kia, with core users including GM, Renault, Volvo, etc. The power battery has entered the supply chain of mainstream automobile enterprises such as Daimler and Volkswagen at the initial stage. Among the world's top 20 automobile brands, it has cooperated with 13 of them, covering almost all the major European vehicle manufacturers.Customer structureThe supply shares of American, European, Japanese and Korean products are also relatively balanced.

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Among the top four power battery companies, Ningde era mainly focuses on cultivating domestic first-line automobile enterprises, gradually optimizing customer structure, and entering into the supply chain of international automobile enterprises such as Tesla and BMW. And Panasonic and SamsungSDIThe customer base of our company is relatively single, and we rely on big customers. by comparison,LGChemistry is the first and best one to go international.

If Ningde is a big brother in China, LG Chemical is a big overseas player.

Xueba may be late, but he will never be absent. Taking advantage of the trend of European electrification, LG Chemical took off smoothly as a follower for many years.

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On the detailed reasons for LG Chemical's ascent to the top, sneresearch explained in its report: good performance on Tesla Model 3, Renault Zoe and Audi e-tron.

This Tesla Model 3, as defined in the report: made in China.

In fact, although the technology foundation is good and has been cultivated for many years, LG Chemical has not been able to eat the fat of China, the world's largest new energy market, due to domestic industrial policies. In October 2015, the Ministry of industry and information technology issued regulationsTo exclude foreign power batteries from China's new energy vehicle market.

This has also affected LG Chemical's global market share. In 2015, China became the world's largest new energy market for the first time. In 2016, LG Chemical's share in the global power battery market was only 4%, far from the 16% share of Ningde times. In 2018, the number rose to 7%, and in 2019 it became 10%, but the first and second differences were: Ningde era (28%), Panasonic (24%).

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The inflection point occurred in 2019. In June 2019, the Ministry of industry and information technology abolished the above regulations and opened up the domestic market. LG restarted its Chinese factories and relocated in China.

With years of financial and technical advantages, LG Chemical also reached a cooperation with Tesla on the supply of batteries on January 29 this year to supply batteries for model 3 and y of its Shanghai factory.

It not only seized the European market, but also the domestic market which was not advanced. LG Chemical, which had been preparing for many years, successfully borrowed double advantages this time.

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After LG Chemical obtained large orders from Tesla, Chinese enterprises have penetrated into LG Chemical's industrial chain.

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From all aspects of the industrial chain, it is difficult for Chinese suppliers to increase the share of cathode materials due to LG Chemical's self built factory or holding shares. However, the delivery of Tesla order will boost LG's demand for anode materials, and the share of domestic suppliers is expected to continue to rise.

In addition, although LG Chemical has surpassed the market share,But it still can't beat the Ningde era in terms of operating profit margin.On the one hand, the high cost-effectiveness of China's raw material supply chain is incomparable.

On the whole, with the increase of penetration rate of new energy vehicles in the world (the three major markets of China, the United States and Europe),Considering capacity expansion and cost control,LGThe chemical industry chain will continue to transfer to Chinese suppliers.

In the future, it will not only make money with Ningde era, but also reap Korean power battery Xueba, and Chinese factories will continue to play their cash capacity.

reference material:

[1] Bohai Securities, the battery business drives the strategic layout of LG Chemical, and the scale of production capacity orders reaches a new high

[2] BOC Securities: competing for global power market, who is the leader of battery giant?

[3] China automobile network, financing 480 million euro, LG will increase the production capacity of Poland battery factory.

[4] Founder Securities, new energy vehicle battery industry chain value discovery

[5] . Soochow Securities: Maili battery overseas and topic 1 LG Chemical: accumulated and accumulated, leading growth potential is unlimited

[6] Guotai Junan Securities: 2009-2018: the decade of China and the United States, and also the golden decade of science and technology

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