Tesla Power Battery Factory Opens Global Power Battery Facing Shuffle

As the sales of electric vehicles broke out, the demand for lithium carbonate as a raw material for batteries will continue to be strong. In a report released at the end of 2015, Goldman Sachs believes that lithium may become a "new age of gasoline." Goldman Sachs expects that lithium carbonate demand is currently 160,000 tons per year, and every 1% increase in electric vehicle penetration will bring 70,000 tons of new lithium carbonate. By 2025, only the growth of the electric vehicle market is expected to drive the entire lithium market demand to reach 470,000 tons.

On July 29th, the opening ceremony of the Giga factory, the world's largest Lithium Battery factory, will be held soon. The plant is located on the outskirts of eastern Reno, Nevada, and covers an area of approximately 540,000 square meters. It is a $5 billion investment by Tesla.

At the beginning of this month, the super factory construction was only completed 14%. In order to supply batteries for the Model 3 electric car under development, Tesla doubled the number of construction workers to ensure that the plant was completed and put into production in time.

According to Bloomberg News, once put into production, the cost of batteries used by Tesla electric vehicles will drop by at least about 33%. Tesla battery supplier Matsushita expects that the plant will start mass production in November this year. It is expected that it will achieve full capacity operation by 2020, producing 500,000 Lithium Batteries per year, exceeding the sum of lithium batteries produced by all other factories around the world.

Related US stocks rose sharply

The Giga factory was founded by Tesla and Panasonic. In order to be able to sell Model 3 at a lower price and profit, the plant is critical for Tesla to break through the capacity bottleneck. At the beginning of this year, Tesla Model 3 began accepting reservations. Because demand is too large, Tesla plans to increase its production capacity from the current 80,000 to 90,000 units to 500,000 units within two years, an increase of nearly five times, and further increase to 1 million units by 2020, ahead of previous plans. It took a full two years.

Tesla CEO Elon Musk released the second chapter of the Tesla Blueprint on July 21. According to the plan, Tesla's future business will be integrated into solar energy (14.83, -0.910, -5.78%) products, electric public transport, driverless cars and derivative leasing and sharing markets, thus becoming a vertical integration. Clean energy business.

Huaan Securities recently revealed in a research report that Japan's Matsushita recently predicted that Tesla's strong demand for lithium batteries will drive its Auto Battery revenue to more than double in three years. Kenji Tamura, an executive at Panasonic's automotive and industrial systems business, said he expects the company's annual revenue for its Car Battery to increase to 400 billion yen ($3.98 billion) in the fiscal year ending March 2019. In contrast, the company's annual revenue for automotive batteries for the fiscal year ending March 2016 was 180 billion yen.

According to Kenji Tamura, the company expects the combined annual revenue of automotive batteries and energy storage products to increase 1.5 times over the same period to reach 500 billion yen. "Panasonic plans to continue to advance the $1.6 billion investment plan for the latter's Gigatron plant in Nevada at the request of Tesla to meet Tesla's upcoming orders for the Model 3 sedan."

As the sales of electric vehicles broke out, the demand for lithium carbonate as a raw material for batteries will continue to be strong. In a report released at the end of 2015, Goldman Sachs believes that lithium may become a "new age of gasoline." Goldman Sachs expects that lithium carbonate demand is currently 160,000 tons per year, and every 1% increase in electric vehicle penetration will bring 70,000 tons of new lithium carbonate. By 2025, only the growth of the electric vehicle market is expected to drive the entire lithium market demand to reach 470,000 tons.

Affected by the opening of the super factory, the market's attention to the lithium battery sector continued to rise. Shares of Bacanora Minerals, which supplies lithium materials to Tesla's super battery factory, rose 4.4% in the US market last Friday.

Among other lithium suppliers, Oroplata Resources rose 4.6%, SQM rose 0.8%, Nemaska lithium rose 13.24%, Yabao rose 0.9%, and FMC rose 0.3%.

Competition is concentrated in Asia

Tesla is only a representative of the entire industry. The German Volkswagen is also working hard to develop new energy battery vehicles. It plans to make the annual sales of pure electric vehicles reach 2 million to 3 million in 2025. According to He Xinjie, a researcher at Wei Shi Capital, the new energy battery car industry is a booming sunrise industry. “From government to business to capital, it is now a period of enthusiasm.”

In a previous analysis report, Ping An Securities pointed out that as an important foundation of new energy and the implementation of Industry 4.0 (2725.61, -145.300, -5.06%), lithium-ion equipment companies continue to benefit from demand growth and policy support. At present, the revenue of China's lithium battery equipment industry is generally below 300 million yuan (RMB), and there is huge room for growth. After the large-scale investment climax, it is expected that there will be industry reshuffle in the future, and the market share of the industry leader will continue to increase.

He Xinjie told the 21st Century Business Herald reporter that according to his personal rough statistics, from the second half of 2015 to March 2016, after the new energy gradually became a slogan, some of the listed companies were not originally related industries, but also wanted to be here. The idea of taking a share of the wave to buy an existing battery manufacturer has involved more than 20 billion yuan (RMB), and this does not include companies that are not listed.

“Although the demand is there, if the product quality cannot meet the requirements, the market will not buy it at the end, and finally it will focus on several manufacturers with better quality.” He Xinjie said that the actual power battery gap in 2015 was 3.5 MWh. By 2016, the planned production capacity will be surplus according to the plan, and the overcapacity will be more serious by the end of next year.

He expects that under such circumstances, the power battery industry will start shuffling from next year.

It is understood that the current production of lithium batteries is concentrated in the Asian region, and competitive battery manufacturers are mainly concentrated in South Korea and Japan. Musk said his battery factory will compete with its Asian counterparts for more market share.

"Tesla's high-profile claim to gain market share may have a great impact on the selection of Japanese and Korean companies and Chinese related companies in the future technology route." He Xinjie analyzed, because the ternary lithium battery and Lithium Iron Phosphate Battery Each has its own advantages and disadvantages. The former has advantages in terms of battery life and number of charge and discharge, and the latter has better safety. If Tesla can solve the security problem, it is very competitive.