Abandoned Cobalt: Tesla Battery Switching Routes "Shockwave" Inside

Tesla's talks about switching battery routes with the Ningde era have triggered a huge chain reaction in the A share market.

According to the institutional market, Tesla is negotiating with the lithium battery supply in the Ningde era. It plans to use cobalt free batteries in the manufacture of Model 3 models in China to replace the current Panasonic 811 three yuan lithium battery currently applied by Tesla, and Tesla also said that there is currently a merger agreement with the Ningde era, while the lithium iron phosphate battery in the Ningde era itself does not contain cobalt. In addition, Tesla announced that the amount of cobalt contained in its supercell will also be zero.

With the abandonment of cobalt by new energy vehicles, a large number of cobalt ore companies fell sharply after opening in February 19th, and the shares of Hua You cobalt and Han Rui cobalt industries were directly down.

In the industry view, the Ningde era may take the CTP (Cell To Pack, battery directly integrated battery pack) scheme in cooperation with Tesla, but the scheme is more likely to be applied to the standard version of the Model 3 long range mileage, and the three yuan battery scheme is still needed in the long endurance life, so the impact on cobalt will still be limited to a certain extent.

Tesla's talks about switching battery routes with the Ningde era have triggered a huge chain reaction in the A share market. - Gan Jun photo

Abandoning the "cobalt" strategy

Tesla's "abandonment" of cobalt has brought a heavy blow to valuations on the cobalt ore listed companies.

On the closing date of February 19th, the stock prices of cobalt companies such as Hua You cobalt and Han Rui cobalt were directly down, while the batteries such as Germany's nanomaterials, Xiangtan's electrification and other cobalt free batteries rose sharply.

In fact, the power battery's desire to abandon cobalt has long been due to further reduce the cost of batteries.

"The unit price of cobalt has always been three yuan, which is more expensive, so in order to reduce the cost of batteries, we have been discussing how to reduce cobalt content." A person close to the Ningde Times said, "it is precisely to reduce costs, the three yuan battery has gone to the development path of high nickel, from the beginning of 523 to 622, and now to 811 (the nickel cobalt manganese / aluminum ratio of cathode material is 8:1:1), while the price is reduced while the energy density is also increasing."

From the perspective of the cost of three yuan battery, Tesla and Ningde cooperation also need to change the battery materials to further compress domestic costs.

"The Ningde era itself makes three yuan batteries, and also makes lithium iron phosphate batteries." A new energy vehicle analyst with a listed broker said, "but if you only compare three yuan battery, the cost is less than that of Tesla's Panasonic plant. On the one hand, Tesla has chosen the NCA route under the superiority of battery management. On the other hand, the single supply volume is large and the unit price is reduced."

According to a report by UBS, Tesla and Panasonic CO produced the cost of battery production of 111 US dollars /kwh, and the LG chemical cost of Shanghai super plant was about $140 /kwh, while the cost of the same period in Ningde was as high as 150 US dollars /kwh.

"Battery is the core component of the supply chain, but the goal of domestic switching is to reduce costs. If we use the three yuan battery in the Ningde era, the cost reduction effect may be relatively limited." The analyst pointed out, "but if we use lithium iron phosphate, the cost may be further compressed."

According to industry estimates, the Ningde era and Tesla cooperation is most likely to adopt the CTP battery based on lithium iron phosphate, which directly integrates batteries into battery packs, bypasses the module links, and saves space for more electric cores to increase energy density.

It is understood that the advantage of three yuan lithium battery is that it has higher energy density and higher thermal management requirements, while lithium iron phosphate battery has better thermal stability, but its energy density is less than three yuan lithium battery. At present, the energy density of lithium iron phosphate battery using CTP can reach 200Wh/kg, while the three yuan lithium battery has generally broken through 300Wh/kg.

"If we determine the lithium iron phosphate, we need to use the CTP scheme to increase the energy density." The analysts pointed out.

Cobalt future

Although Tesla's cooperation with the Ningde era may be carried out in the form of cobalt free batteries, the consumption of cobalt will continue to rise in the next five years.

"Benefiting from the rapid development of the new energy vehicle industry and the warming up of consumer electronics in the 5G trend, we expect global cobalt consumption to grow by 11.1% to 148 thousand tons in 2020. By 2025, global cobalt will reach 205 thousand tons, and 2020-2025 years CAGR will be 7.4%, and the annual cobalt consumption increment will exceed 10 thousand tons." CITIC Securities said.

A battery industry close to Tesla also pointed out that the application area of lithium iron phosphate battery may be limited to the standard version of the Mode 3 long mileage, while the long endurance version still needs three yuan structure.

"Even if the CTP structure is adopted, the existing energy density may not be able to replace 21700 batteries. At present, the single driving long endurance model 3 NECD is longer than 650 kilometers, and the purchaser has certain expectations for the improvement of the mileage." The person frankly said, "but CTP mode without changing the material, continue to enhance the energy density of the space is not large, so there will be a considerable part of the long endurance vehicles need to use three yuan battery."

"For the sake of increasing energy density and reducing material cost, the development trend of cathode materials with high nickel and low cobalt is definitely higher." CITIC Securities also pointed out that "but cobalt elements in the three yuan material system has a stable layered structure and enhance the cycle performance of the role, phasing is still irreplaceable. At present, three yuan cathode materials enterprises have not yet achieved large-scale production and sales of cobalt free cathode materials."

"If 20% of the models use lithium iron phosphate, which affects about 400 tons of cobalt consumption, it will not change the long-term growth trend of cobalt consumption, and continue to be optimistic about the rising trend of cobalt price in 2020." CITIC Securities said.

However, some analysts have pointed out that because of the "zero cobalt" approach, the role of cobalt in new energy vehicles will continue to decline.

In recent years, the development of lithium batteries is approaching a limit after the increase of new energy vehicles investment. The battery industry said, "whether it is the CTP program or BYD's blade battery, it is a breakthrough in battery structure design. In essence, it is stacking the core and squeezing the space. What the market really needs is the innovation of materials, and this time Tesla announced that its super batteries also do not contain cobalt, indicating that in the medium and long term, there is indeed the possibility of abandoning cobalt. Though not in the short term. "

"Tesla's battery plan does not contain cobalt, does not mean that other power battery manufacturers can immediately give up the three yuan structure, and Tesla battery and electronic control technology reserves have been leading the industry for several years, the industry can scale large-scale replication is uncertain, but also depends on whether the stability of the new battery can withstand the test." The battery industry said frankly.

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