[Depth] Forecast of China's lithium battery industry prospects in the next 5 years

This paper is mainly to analyze the development factors of China's lithium battery industry and forecast the production of lithium-ion batteries in China in 2017-2021.

First, favorable factors

(1) Industry standards and regulations are promulgated

In recent years, charging treasures and mobile power sources have developed rapidly, and the market is hot. There are a wide range of application groups. Due to the low barriers to entry of mobile power, there is also a lack of mandatory implementation standards in the industry. Therefore, the quality of this product is mixed, and the safety accidents of self-ignition and explosion of mobile power are not uncommon. China's first mandatory standard for lithium-ion batteries - "Safety Requirements for Lithium-Ion Batteries and Battery Packs for Portable Electronic Products" was officially implemented on August 1, 2015. This standard is conducive to the healthy development of the lithium battery industry.

In order to strengthen the management of lithium-ion battery industry, improve the development level of the industry, guide the industrial transformation and upgrading and structural adjustment, and promote the sustainable and healthy development of the lithium-ion battery industry, on August 31, 2015, the Ministry of Industry and Information Technology issued the "Lithium-ion battery industry standard conditions." The document regulates industrial layout and project establishment, production scale and process technology, product quality and performance, comprehensive resource utilization and environmental protection, safety management, health and social responsibility, supervision and management.

(2) New energy vehicles

In 2012, the State Council discussed and approved the “Energy Conservation and New Energy Vehicle Industry Development Plan (2012-2020)” (hereinafter referred to as “Planning”), which clarified the main strategic orientation of pure electric drive for the transformation of the automobile industry, and promoted the popularization of non-plug-in. type of hybrid vehicles, and proposed in 2020 more than five million target in 2015, pure electric and hybrid vehicle production and sales total 500,000. The introduction of the "Planning" in the invisible outlines a huge market profile for the power battery industry, the core component of energy-saving and new energy vehicles.

In July 2014, the State Council issued the “Guiding Opinions on Accelerating the Promotion and Application of New Energy Vehicles”, re-emphasizing the development of new energy vehicles as a national strategy, benefiting from the continuous growth of new energy vehicles, and the lithium battery industry ushered in a new round of development opportunities.

(III) Large-scale development of commercialization of energy storage industry

In June 2014, the State Council issued the “Energy Development Strategic Action Plan (2014-2020)”, which introduced energy storage into national energy planning for the first time, and proposed to strengthen power and power grid planning, scientifically arrange peak regulation, frequency modulation, and energy storage. Supporting ability to effectively solve the problem of abandoning wind, abandoning water and abandoning light.

On June 7, 2016, the National Energy Administration issued the Notice on Promoting the Participation of Electric Power Storage in the Compensation for the Auxiliary Service Compensation (Market) Mechanism in the “Three North” Region, and for the first time established the status of electrical storage as an independent market entity. It is clear that the electricity storage can participate in the FM frequency peaking auxiliary market service. The new policy will accelerate the commercialization of the energy storage industry through the improvement of the auxiliary service market compensation mechanism.

Energy storage technology is a strategic support for the transformation of energy structure and the transformation of power production and consumption patterns in the future. Driven by the development of energy storage technology and commercialization trends, power lithium batteries as a protagonist of the new energy industry will also usher in new opportunities for development. The large-scale development of energy storage will promote the extension and integration of the lithium battery industry chain, and promote the power lithium battery industry to connect with the capital in the middle and lower reaches, and synchronize with the market to achieve win-win cooperation.

(4) Wide application

Lithium-ion batteries are widely used in mobile phones, notebook computers, power tools, electric vehicles, street lamp backup power supplies, navigation lights, and small household appliances. It can be said to be the largest application group. At the same time, lithium batteries are widely used in energy storage power systems such as hydropower, firepower, wind power and solar power stations, uninterruptible power supplies for post and telecommunications, as well as power tools, electric bicycles, electric motorcycles, electric vehicles, military equipment, aerospace, etc. field.

Second, the unfavorable factors

(1) Poor security

In the development process of lithium batteries, because of the different positive and negative materials and their formulations, there are many unsafe problems such as explosion and combustion. On the one hand, when the user is using, the short circuit occurs due to improper use, and a combustion explosion occurs. On the other hand, the chemical properties of lithium ions are very active. In the case of graphite anodes, once high temperatures occur, explosive combustion is likely to occur. Therefore, manufacturers usually install lithium battery protection boards inside the batteries to protect the batteries. However, some of the brand-name batteries are very different from the brand batteries in the raw materials and assembly process. The quality of the lines and protection boards used is not high, and it is easy to be natural after aging.

(2) Economic environment

In 2015, the global economic recovery was slow, and China’s economic structure, micro-variation and turmoil intensified. In 2016, the Chinese economy will continue to bottom out. Affected by macroeconomic and national policies, the risk of bad debts in the downstream application areas of the lithium battery industry may increase the risk of bad debts, which may affect the development of the industry.

In addition, the lithium battery industry has unfavorable phenomena such as repeated investment in production capacity and disorderly competition, which is not conducive to the long-term healthy development of the industry.

(3) Foreign companies occupy the high-end market

The global lithium battery industry is basically concentrated in China, South Korea and Japan. Compared with the Korean and Japanese giants, there are a large number of Chinese companies, but the scale is generally small. It is widely expected that in the second half of 2016, power lithium batteries will reach a balance between supply and demand, and industry reshuffle is inevitable. With Samsung SDI, LG Chem and Panasonic investing in factories in China, the pressure on domestic lithium battery manufacturers is self-evident. Compared with domestic manufacturers, international giants have comparative advantages in terms of battery consistency, stability, and cycle life, and are also attractive to downstream OEMs. Japan and South Korea lithium battery giants have entered the Chinese market will also play a huge role in the lithium battery industry chain and even the domestic new energy vehicle market.

Compared with other countries, the lithium battery industry in China is still very different in core technology. More than 30% of the domestic lithium battery materials are imported. For this reason, the manufacturing cost of domestic lithium battery cells is very high.

(4) Environmental issues

The pollution of the lithium battery itself is not serious, but in the process of extracting and smelting, chemical substances such as lithium hexafluorophosphate and polypropylene dichloride are produced, which may cause environmental pollution.

Lithium batteries have less environmental pollution than other batteries, so fewer companies recycle lithium batteries. However, the discarded lithium battery contains a large number of non-renewable and economically valuable metal resources, such as cobalt, lithium, nickel, copper, aluminum, etc., if it can effectively recycle discarded or unqualified lithium batteries, it can not only reduce the waste battery. The pressure on the environment can also avoid the waste of metal resources such as cobalt and nickel.

Third, the forecast of China's lithium-ion battery production in 2017-2021

In 2015, China's lithium-ion battery production was 5.60 billion, an increase of 3.1%. From January to September 2016, the output reached 5.24 billion, an increase of 32.8%. We expect China's lithium-ion battery production to reach 7.35 billion in 2017, and the compound annual growth rate in the next five years (2017-2021) is about 7.17%. In 2021, China's lithium-ion battery production will reach 1.70 billion.

4. Forecast of China's lithium-ion battery sales revenue for 2017-2021

In 2014, China's lithium battery product sales revenue was 71.5 billion yuan, an increase of 21%; in 2015, sales revenue was about 92 billion yuan. We expect China's lithium-ion battery sales revenue to reach 123.8 billion yuan in 2017. The compound annual growth rate will be 16.89% in the next five years (2017-2021). China's lithium-ion battery sales revenue will reach 2,311 in 2021. 100 million yuan.

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