Drawing by Guo Chenkai◎Reporter Qiu Dekun
Recently, the Ningde era has returned to a trillion-dollar market value, and its layout of the entire industry chain has become increasingly clear. A reporter from Shanghai Securities News noticed that the expansion of CATL is mainly from the perspective of coordinated development of the industrial chain. The upstream controls various raw materials, and the downstream joins forces with multiple giants to expand multi-field application scenarios. Horizontally, power battery production bases are deployed at home and abroad.
It can be seen that in the criss-crossed industrial landscape, CATL has come from behind in the field of power batteries and has gradually stepped out of the development path of “upstream and downstream integration”. Looking up and looking far, how CATL will further enrich and consolidate the industrial territory in the future is quite interesting.
Take multiple measures to deploy upstream
The upstream of the power battery industry chain, including new energy mineral resources dominated by nickel, cobalt, lithium, and phosphorus, has experienced supply shortages this year. As a leader in power batteries, CATL will be under short-term pressure in the first quarter of 2022.
CATL has keenly set its sights on the upstream of the industrial chain. Jiang Li, secretary of the board of CATL, said that in addition to negotiating price adjustments with customers and increasing production capacity and delivery, the company is also advancing as planned in terms of the development progress of lithium mines. The specific mining progress and scale should consider the price of lithium carbonate.
At present, Ningde Times is accelerating the development of the upstream power battery territory, promoting the development and construction of lithium-bearing china clay mines in Yichun, Jiangxi, and phosphorus resource industry chain projects in Guizhou and Yichang, and further ensuring the safety and stability of the supply chain. Jiang Li introduced that on April 20, the company officially obtained the exploration right of the local lithium mine in Yichun, and will actively promote the procedures such as exploration and mining in the future.
In addition to the above-mentioned mineral projects, CATL has deployed important upstream links in recent years, including positive and negative electrode materials, diaphragms, electrolytes and other materials and equipment, thereby further improving the resilience of the supply chain. Industry insiders believe that the layout of CATL in the upstream field can not only ensure the supply of raw materials, but also help to ensure the implementation of new technologies, reduce the risk of material price fluctuations, and achieve efficient and high-quality product delivery.
Wang Chuanfu, chairman of BYD, previously said that the company engaged in vertical integration because no company was willing to support it initially. Today, the new energy vehicle industry is gradually developing and mature, and giants such as Ningde Times have extended upstream, attracting power battery companies such as Yiwei Lithium to follow.
From the perspective of the expansion path, CATL mainly adopts the methods of shareholding, mergers and acquisitions, and joint ventures. In April last year, CATL decided to invest no more than 19 billion yuan with its own or self-raised funds in order to carry out domestic and overseas industrial chain-related investments. A relevant person from Ningde Times said that the company’s investment direction revolves around the main business and lays out the upstream and downstream of the industrial chain to ensure the supply of key resources and strengthen the cooperation and coordination of the industrial chain.
The Ningde era is known as the “IPO booster” by the outside world. According to incomplete statistics, since the beginning of this year, more than 20 companies in the supply chain of CATL have sprinted for IPO on the Science and Technology Innovation Board or GEM, and 14 companies have been listed, submitted for registration and passed the meeting, involving cobalt salts, positive and negative materials, ternary Precursor, electrolyte, lithium battery equipment, copper foil, structural parts, energy storage inverter, PCB and other fields.
Build power battery bases in many places
“The arrival of full electrification is accelerating, and we will soon enter the TWh (1TWh=1000GWh) era.” Zeng Yuqun, chairman of CATL, believes that the real challenge for the industry chain and enterprises lies in consumers’ demands on R&D capabilities, large-scale delivery on manufacturing capabilities, The in-depth development of the industry has put forward higher requirements for service capabilities.
Therefore, Ningde era accelerated the horizontal expansion of the territory and accelerated the layout of power battery production bases at home and abroad. At present, CATL has 11 large-scale production bases in China, including Ningde, Xining, Liyang, Yibin, Zhaoqing, Yichun, Shanghai Lingang, Xiamen, Guiyang, Jining and Luoyang.
Among them, the latest action of CATL is to invest no more than 14 billion yuan to build a new energy power battery system and energy storage system production line in Luoyang. On September 30, Luoyang State-owned Assets planned to increase the capital of Sichuan Times, a subsidiary of Ningde Times, with 100% equity of its Luokuang Group, thus forming an equity bond with Ningde Times.
China Luoyang Group is the second largest shareholder of CMOC, and CATL indirectly becomes the second largest shareholder of CMOC, which is the world’s leading producer of tungsten, cobalt, niobium, molybdenum and an important copper producer. Xu Hui, secretary of the board of CMOC, told a reporter from Shanghai Securities News: “The two parties will achieve a win-win situation through this transaction, and promote the close integration of the new energy resource side and the application side.”
A person in the new energy vehicle industry chain analyzed that the current investment attraction in various places attaches great importance to each other’s “carbon content”. As a leader in power batteries, CATL, coupled with the tens of billions of investment in power battery bases, is naturally valued by the local government and deeply bound.
Compared with the basic layout of domestic production bases, going overseas is the focus of the future expansion of the Ningde era. At present, CATL’s overseas production bases, including Erfurt, Germany and Debrecen, Hungary, have production capacity plans of 14GWh and 100GWh, respectively.
“The company has discussed various possible supply and cooperation plans with American customers, as well as the possibility of localized production.” Zeng Yuqun said in response to the arrangement of the North American factory, overseas customers hope that the company will start from the next fixed-point cycle, that is, even after 2026. By 2035, increase the proportion of supply to become the most important supplier.
However, the overseas expansion of the Ningde era was not smooth sailing. CATL faces fierce competition in the designation of overseas customer projects. Since 2021, CATL has been recognized by overseas customers in terms of products, technology, delivery, and services.
Develop application scenarios in multiple fields
CATL not only quickly entered various application fields, but also actively joined hands with related companies to form long-term alliances.
In the field of electrification of passenger cars, CATL has reached a framework agreement on the supply of cylindrical batteries with BMW Group, and has shared a contract worth over 10 billion euros with Yiwei Lithium Energy. It plans to supply the next generation of batteries from 2025. Looking back at the history of CATL, BMW Group is an important driving force in its growth. Zeng Yuqun said: “BMW Group is a special and important partner of CATL.”
The car brands that CATL has cooperated with include Tesla, Hyundai, Ford, Daimler, Ideal, Weilai, etc. Among them, the Kirin battery of the CATL era has been used by Krypton and AITO, and has established a global strategic partnership with Ford Motor, covering the supply of power batteries in China, Europe and North America.
More importantly, CATL is not satisfied with just being a battery manufacturer, and is deeply involved in the construction of the new energy vehicle brand Avita. The other two partners of the brand are Changan and Huawei. Zeng Yuqun introduced: “For all Avita models, CATL will provide the latest and best power batteries to support Avita to become the best smart electric vehicle brand in China and even in the world.”
“Ningde era’s participation in car building is a kind of deep binding, which can lock in a large number of power battery orders in the future.” Zhang Xiang, dean of the New Energy Vehicle Technology Research Institute of Jiangxi New Energy Technology Vocational College, believes that car building is now an outlet, and car building New forces and other car companies have gained a large market value after IPO, and CATL can enjoy capital dividends.
In addition to the electrification of passenger vehicles, CATL has been involved in the electrification of commercial vehicles, energy storage, as well as smart mines, power exchange services, optical storage charging and inspection, smart ports, and electric ships. Zhang Xiang said that CATL is a leading enterprise, and multi-field and multi-directional investment is conducive to reducing operational risks.
Ren Huale, vice president of Cornerstone Capital, believes that in the context of the energy revolution, every industry will usher in electrification and intelligentization. From the perspective of the development path of leading battery companies, they are undergoing horizontal industrial expansion, expanding from the traditional automotive field to industries such as energy storage, base stations, and data centers. These business fields are important growth points for future development.
However, the Ningde era needs to use actions to answer how to “keep success”. Compared with the giants that have gradually grown up after a hundred years, the large-scale expansion of the territory of CATL in the short term will test its operation and management capabilities, as well as its ability to cooperate with a large number of partners.
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Related events
- Returning to the trillion-dollar market value, the whole industry chain map of the Ningde era has emerged2022-10-17
- Ningde Times: It is estimated that the net profit attributable to the parent in the first three quarters is 16.5 billion yuan to 18 billion yuan, a year-on-year increase of 112.87%-132.22% 2022-10-10
- From January to August, the global installed capacity of CATL batteries exceeded 100GWh, surpassing that of last year2022-10-09
- CATL will start supplying cylindrical batteries to BMW in 20252022-09-09
- Honda China, Dongfeng, and GAC jointly established a battery procurement company and established a long-term procurement system with CATL2022-09-07
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