“Later Auto” exclusively learned that around the manufacturing system, Ningde Times announced an organizational structure adjustment last week, setting up a new layer of regional structure above each production base.
Before the adjustment, the top manager of the Ningde era base was the base operation director. They reported to Feng Chunyan, co-president of the supply chain and operation system of the Ningde era, and Feng Chunyan reported to Zeng Yuqun, chairman and general manager of the Ningde era. After the adjustment, each operation director will report to 6 regional managers, and the regional managers will report to Feng Chunyan.
This means that some decision-making power of the manufacturing system in the Ningde era will be centralized at the headquarters to improve efficiency.
The power battery industry is a large-scale, high-tech manufacturing industry, and manufacturing capacity and expansion efficiency are the core competitiveness of power battery companies. The continuous improvement of manufacturing capacity depends on a sophisticated and efficient production management system.
“Later Auto” exclusively learned that around the manufacturing system, Ningde Times announced an organizational structure adjustment last week, setting up a new layer of regional structure above each production base.
CATL currently has 32 battery and material production bases, and they are now divided into 6 major regions. Regions are not based on geographical distance, but may be customers or product lines. According to “Later Auto”, the Hudong and Huxi bases located in the Ningde Times headquarters and separated by a river are divided into Region 1 and Region 2 respectively, while the Turingen Base in Germany and the Z Base of the Ningde Times Headquarters are assigned to the Greater Region. District 4.
Reporting relationships change accordingly. Before the adjustment, the top manager of the Ningde era base was the base operation director. They reported to Feng Chunyan, co-president of the supply chain and operation system of the Ningde era, and Feng Chunyan reported to Zeng Yuqun, chairman and general manager of the Ningde era. After the adjustment, each operation director will report to 6 regional managers, and the regional managers will report to Feng Chunyan.
Feng Chunyan, born in 1975, has worked with Zeng Yuqun for many years. After graduating in 1989, Zeng Yuqun joined Xinke Magnetic Power Plant in Dongguan, Guangdong Province. In 1999, he participated in the establishment of ATL (Dongguan New Energy), which is mainly engaged in lithium batteries for consumer electronics. In 2011, he founded Ningde Times. Feng Chunyan also worked in Xinke Magnetic Power Plant, and later joined ATL and Ningde Times, and served as senior manager of Ningde Times, company supervisor and co-president of supply chain and operation system. An Ningde era investor commented that Feng Chunyan is one of Zeng Yuqun’s most capable assistants.
Ningde Times stated in the email announcing the adjustment that the adjustment is due to the increase in business volume and the increase in the number of manufacturing bases. The new structure is more conducive to agile response to customer changes, resource integration and orderly expansion.
Adding managers and layers of management is a common option when a business expands. It is understood that from 2020 to the end of 2022, the number of employees in Ningde era will increase from 33,000 to over 100,000, the number of production personnel will increase from 20,000 to over 70,000, and the annual production capacity will increase from 69.1 GWh to about 300 GWh.
The adjustment also means that some decision-making power in the manufacturing system of the Ningde era will be centralized at the headquarters to improve efficiency.
The operation directors of each production base in the Ningde era have greater authority. In addition to being responsible for the daily production and operation of the base, most production bases have their own human resources department, and the operation director has the right to appoint, dismiss, and promote employees in the base. The Operations Director can also set up some customer-facing R&D projects. Ningde era headquarters is in charge of sales, customer allocation, technology, product research and development, raw material, equipment procurement and product delivery.
A person close to the Ningde era said that last year, the management of the Ningde era noticed the phenomenon of repeated construction in some production bases. An example is that two production bases that are very close to each other have established their own R&D centers in the past few years, and there have been some repeated investments in R&D projects and equipment procurement. The person said that after the adjustment, some resources in the Ningde era can be better shared, which can improve the efficiency of expansion and production expansion.
The entire smart electric vehicle market is facing more intense competition and more variables. CATL now needs to organize a more flexible and global production system to cope with a more diverse, decentralized and global customer portfolio.
According to the research report of Soochow Securities, in the first three quarters of 2022, the top five customers of Ningde era are Tesla, Geely, Weilai, GAC and Xiaopeng. The proportion of customers is less than 10%.
Among the old major customers, Tesla’s growth rate has slowed down. Last year, it sold a total of 1.31 million vehicles, falling short of its target of 1.5 million vehicles. Tesla, Xiaopeng, GAC and Weilai have all added new power battery suppliers in the past two years. GAC and Weilai have also announced that they will develop and produce their own batteries. Li Auto, another customer of the Ningde era, is also cooperating with Sunwoda to develop batteries, and the two may reach a supply agreement.
More new orders in the Ningde era will come from traditional car companies in various countries that have increased investment in electric vehicles, such as Volkswagen, Hyundai, BMW, and Honda, and new players that are still entering the market, such as Xiaomi. Their installed capacity in Ningde era will increase. Ningde Times has received orders from Xiaomi, and Honda gave Ningde Times a large contract to purchase 123 GWh within 8 years in December last year.
The test of more intense competition for power battery manufacturing lies in the uncertainty of the sales volume of car companies, and the demand for batteries is also “uncertain”. Orders between some car companies and Ningde Times are signed once a year, and a range of installed capacity is set each year, but the predicted value may differ from the actual situation. The Ningde era needs to adjust production plans more flexibly to cope with demand changes.
The overall market changes that Ningde era needs to face also include that in 2023, the growth rate of electric vehicle sales in China is likely to slow down, and China now accounts for nearly 60% of global electric vehicle sales. In the past year, the penetration rate of new electric vehicles in China has reached 27%. The entry of electric vehicles into the mass market will be more affected by the macro economy and the overall willingness to consume. At the same time, the Chinese government will stop new energy subsidies from 2023, and newly sold electric vehicles will no longer enjoy a subsidy of about 10,000 yuan.
Now BYD, which has the largest sales volume and the strongest growth momentum, produces its own batteries and does not need CATL to supply them. BYD will sell nearly 1.86 million electric vehicles in 2022, accounting for 29% of the Chinese market.
In 2022, CATL’s share of global installed capacity will rise from 33% in the previous year to 37%, and in the most competitive Chinese market, the share will drop from 52% in the previous year to 48%.
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