Or Supply Tesla: BYD Power Battery Continues To Expand Production

When the sodium ion battery of Ningde era stirred up a pool of spring water, Tesla and BYD, the two enemies in full swing, had the possibility of secretly "holding hands" and turning enemies into friends.

On August 5, it was reported that BYD will supply blade batteries to Tesla in the second quarter of next year. At present, Tesla models equipped with blade batteries have entered the c-sample test stage. On August 6, another BYD insider revealed that the situation was true, and that Tesla's first model with blade batteries might be model y.

In response, the relevant head of BYD said "no comment" to reporters of the 21st century economic report. Tesla China has not responded to this matter. However, the vague statement failed to stop the carnival in the capital market. Affected by the boom in the new energy vehicles and lithium battery industry, BYD's share price broke through the 300 yuan mark for the first time last week. The day after the news came out, the intraday share price of BYD reached 317.3 yuan, with a market value of more than 900 billion yuan.

Some people in the industry believe that from this perspective, with BYD's market value soaring, the previous plan to split the battery business may be delayed or put on hold, because once it is split, BYD's share price, which is sought after by the capital market due to the concept of power battery, may be affected.

BYD's new blade battery. Visual China

What is the probability of cooperation?

Tesla CEO musk said at the second quarter report meeting recently that Tesla will gradually turn to lithium iron phosphate battery solution in the future. In the future, two thirds of Tesla batteries will use lithium iron phosphate, and one third may use ternary batteries. At present, the lithium iron phosphate battery of Ningde era is used in Tesla Model 3 standard endurance upgrade version and model y standard endurance version launched in July this year. After signing an agreement in February 2020, the latter became Tesla's supplier, the two sides signed a supply agreement again in June this year. Ningde era will supply power batteries for Tesla until 2025.

In fact, as early as may this year, some media reports said that Tesla may include Yiwei lithium energy in the supply system of Tesla's Shanghai factory to increase the procurement of low-cost batteries. The cooperation relationship may be finalized in the third quarter of this year. However, Yiwei lithium energy issued a clarification notice, saying that as of the disclosure date, it had not made business communication with Tesla on lithium iron phosphate battery, and the above report was groundless.

Due to the increasing demand in China's domestic market and the export expansion of Tesla Shanghai factory, Tesla Shanghai plant is in the stage of capacity climbing. Tesla has previously said that by the end of this year, Tesla's Shanghai plant will have an annual capacity of 450000 vehicles.

This will also expand the demand for power batteries for key components of electric vehicles, and it is possible for Tesla to seek a second local battery supplier. From the development of the whole industry, most automobile enterprises will choose two or more battery suppliers in order to guarantee the battery supply system.

"Competition generally lowers prices and reduces the risk of the supply chain without relying too much on an upstream company. Looking for multiple suppliers is a common way to purchase auto parts. " Some people in the automobile industry told reporters of the 21st century economic report.

Taking Wuling Hongguang Mini EV as an example, its batteries come from many battery manufacturers such as Ningde times, Penghui energy and GuoXuan high tech.

"Companies like Tesla and Volkswagen do not allow single battery suppliers to account for more than 50%. Tesla has determined that lithium iron phosphate will account for 2 / 3 of the total in the future. If Ningde supplies lithium iron phosphate alone, it will be 67% of the market. Then it is logical to find a second and third supplier of lithium iron phosphate, As a product with Chinese characteristics, the suppliers of lithium iron phosphate, including Yiwei lithium energy, which burst out some time ago, are likely to enter BYD this time. "

"For Tesla, the Chinese market has become the second largest market after the United States. With the rapid increase of market share, the supply of power batteries is guaranteed, and the diversification of suppliers is an inevitable choice. BYD's installed capacity in the field of power batteries ranks first, and has begun to supply. Secondly, the low cost, high safety performance and large-scale supply capacity of blade battery are also important factors for other automobile enterprises to choose. " On August 9, qingjiao, Secretary General of Zhongguancun new battery technology innovation alliance and director general of battery 100 people's Committee, said in an interview with 21st century economic reporter.

As said, the cost advantage of blade battery is self-evident. When the blade battery was released in March last year, BYD chairman Wang Chuanfu said its cost could be reduced by 30%, while the industry average cost of LiFePO4 battery was 0.65 yuan / wh, and the cost of Ningde era CTP lithium iron phosphate battery pack was 0.57 yuan / wh. Therefore, the industry estimates that the cost of blade battery is 0.42 yuan / wh.

From the above simple comparison, blade battery is undoubtedly a better alternative. However, it is worth noting that the cost of expanding BYD's battery factory will be added to the quotation of blade battery. At the same time, as BYD's trump card technology, BYD will have more say and initiative in the cooperation negotiation.

"At present, there is no official information (BYD and Tesla cooperation), but I personally think there is possibility of cooperation between the two sides, mainly depending on whether the price can be negotiated," Yu said

However, the big V on the blade battery supply Tesla doubt - "but said the blade battery into the may think too much, unless Tesla redesigned the chassis." In addition, he also said that "as soon as we enter the c-sample stage, we can get the order, which is a bit early. Generally, we have to wait for the c-sample technology to freeze before we can fix the site. We are still too anxious to send a message."

Continue to expand production capacity

Although BYD said it would not comment, it has made frequent moves in recent days, especially in terms of ensuring the supply of raw materials and expanding production capacity.

In mid July, BYD signed cooperation agreements with three enterprises to purchase a large number of lithium hexafluorophosphate, the upstream material of power battery. Among them, no less than 6460 tons of lithium hexafluorophosphate will be purchased from duofluoroduo, and the delivery period is from July 2021 to December 2022; From July 2021 to December 2022, Xintai materials, a wholly-owned subsidiary of Tianji Co., Ltd., supplies no less than 3500 tons of lithium hexafluorophosphate to BYD, and 3600-7800 tons in 2023; Jiangsu Jiujiu technology, a subsidiary of Yan'an Bikang holding company, will supply no less than 1150 tons from July to December this year, no less than 3360 tons in 2022 and no less than 3360 tons in 2023.

According to this calculation, BYD will purchase 14470 tons of lithium hexafluorophosphate before December 2022. According to industry insiders, about 125 tons of lithium hexafluorophosphate is needed to produce 1GWh lithium iron phosphate batteries. This means that BYD's corresponding battery capacity will exceed 115gwh.

At the same time, BYD is also continuing to expand battery capacity. According to qixinbao, Yancheng Fudi Battery Co., Ltd. was established on August 6, with the legal representative of why long, with a registered capital of 50 million yuan. Its business scope includes the manufacture of auto parts and accessories, and the R & D of auto parts. After equity penetration, the company is 100% controlled by Fudi Industrial Co., Ltd., which is a wholly-owned subsidiary of BYD. Before that, Wuwei Fudi Battery Co., Ltd. was established on August 3. Its business scope includes battery manufacturing, battery sales, etc., and is still 100% controlled by Fudi Industrial Co., Ltd., a wholly-owned subsidiary of BYD.

Some analysts pointed out that BYD has been expanding its production capacity or preparing for the battery orders supplied from abroad. BYD disclosed in a record sheet of investor relations activities in July this year that, in addition to BYD, all pure tramcars of the company have been replaced with blade batteries. At the same time, the company is actively expanding its production capacity to cope with the improvement of the sales volume of subsequent company models and the supply of external customers.

In terms of battery external supply, BYD has provided three technical solutions, namely ternary, lithium iron phosphate and blade battery. Currently, the known external battery suppliers of BYD include Ford and Hongqi. In April this year, Wang Chuanfu said that BYD confirmed that it would provide vehicle lithium-ion batteries developed by its subsidiary Fudi battery to other companies. Among them, Fudi batteries carried by Hongqi brand have been shipped. According to the announcement of road motor vehicle manufacturers and products issued by the Ministry of industry and information technology on January 12 this year (the 340th batch), Hongqi brand-new B-class pure electric car e-qm5 carries the lithium iron phosphate battery produced by Chongqing Fudi. In July this year, FAW Group, Changchun municipal government and BYD signed an investment and cooperation agreement on new energy power battery project, or provide battery support for FAW's new energy vehicles.

Previously, it was reported that BYD's blade battery has been designated by Hyundai Motor Group, and a Hyundai project team has been established. It is expected to start supplying overseas next year. In this regard, BYD's secretary has said that "the possibility of cooperation with the modern future will not be ruled out.".

However, Li Yunfei, general manager of BYD's brand and public relations, said in an interview with 21st century economic reporter that Fudi battery still has many partners. As an important part of the car, battery should be involved in the early development process of car body customization and verification. After the verification, there will be business negotiations, and some tests will be carried out on the fixed-point and contract terms. This needs a process and is being accelerated.

According to the 21st century economic report, BYD has built or is under construction battery production bases in Huizhou, Xining, Chongqing, Shenzhen, Xi'an, Changsha, Guiyang, Bengbu and Changchun. Among them, Fudi battery Chongqing factory is the world's first factory for blade battery, with an energy output of 20gwh. The second phase plan is to increase 15gwh and the total capacity is 35gwh; The first "blade battery" production line in Changsha base was officially put into operation at the end of last year, with an annual design capacity of 20gwh; The blade battery capacity of Fudi Guiyang plant is 10 GWH, which is planned to be put into production in July this year. In addition, the total investment of Bengbu Fudi project is 6 billion yuan, and the annual capacity of phase I power battery is 10gwh.

According to previous plans, BYD's total capacity of blade batteries will reach 75gwh by the end of 2021, and the capacity may further rise to 100GWh by the end of 2022.

In addition to actively expanding the capacity of blade battery in China, Fudi battery is also choosing to "drop" in Europe. In March this year, an internal recruitment information of Fudi battery showed that the preparation office for the new factory of Fudi battery (European Group) was preparing to build the first overseas battery factory. The preparation of the factory is to provide supporting facilities for European automobile customers and further expand BYD's overseas business.

In addition, BYD insiders have disclosed that "Fudi battery plans to apply for IPO in the next one to two years.". If the cooperation between BYD and Tesla is true, in addition to the considerable shipment volume brought by Tesla, there is no doubt that it will also be a major positive for the future split and listing of Fudi batteries.

"From the external environment, under the background of global battery shortage, the expansion of power battery capacity is the industry trend; From the internal point of view of BYD, Fudi battery is speeding up the external supply and seeking independent listing. The existing scale is difficult to support, and the expansion of production is also an inevitable choice. " Yu qingjiao said.

In addition to external supply, BYD's acceleration of the transformation of the new energy sector is also one of the driving forces for its continuous expansion of production capacity. BYD announced that in July this year, the total installed capacity of power batteries and energy storage batteries for new energy vehicles was about 3.001gwh, and the cumulative installed capacity of 1-7 was about 15.708gwh. Meanwhile, in July this year, BYD's monthly sales of new energy vehicles exceeded 50000 for the first time, with a year-on-year increase of 234.38%; From January to July, the cumulative sales volume of new energy vehicles was 205071, with a year-on-year increase of 170.62%.

In addition, it is worth noting that as Tesla prices continue to go down, BYD is making efforts to upgrade its brand, and the competition between the two is becoming increasingly fierce. On July 30, Tesla's official website showed that the price of the model 3 standard extended version was reduced by 15000 yuan, and the starting price was adjusted to 235900 yuan after subsidy. Although the women's rights protection incident during the Shanghai auto show had an impact on Tesla's sales volume, the price cut of 15000 yuan made some consumers regain their desire to buy.

BYD is not willing to be outdone. On August 1, BYD Han EV increased its 506km model, and the price after subsidy was 209800 yuan, pointing directly to the Tesla Model 3, which has repeatedly reduced its price. The competition between the two sides is becoming increasingly fierce.

In addition, musk mentioned on last year's battery day that Tesla will launch a model with a price of about 25000 US dollars (about 160000 yuan). Recently, it is reported that the car will be trial produced in small quantities as early as the end of this year, which will undoubtedly further intensify the competition in the new energy vehicle market.

As far as BYD is concerned, if the rumor is true, BYD will supply Tesla with lower cost blade batteries, which will, to a certain extent, have an impact on its dominant vehicle business. However, its expanding capacity makes it urgently need to find more partners. This is also where BYD is tangled. Where to go remains to be seen.

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