Made in China keeps the battery industry stable
Electric cars are driving fast on the highway, and household appliances borrowed stored solar energy to sizzle, but until now, solar energy is just an energy source that can only be obtained during the day.
From California's state government to the Chinese and South Korean governments, and even the Trump administration have taken steps to accelerate the spread of battery energy.
The only obstacle to the big battery boom is that global battery production is not enough. Currently, all new demand in North America, Europe and Asia is constrained by a market that relies heavily on a small number of producers.
Data on global battery supply is difficult to obtain, but people in the industry who are closely following have found evidence of insufficient battery supply. Yayoi Sekine, an analyst at Bloomberg NEF in New York, said: “This demand is something we have never seen before. But supply is hard to keep up with.”
However, the strange thing is that despite the shortage of supply and the growing demand expectations, the price of lithium-ion battery racks continues to decline every year.
In order to have a clear understanding of the near future, consider a battery-powered car. Today, more than 3 million electric vehicles are on the road worldwide; by 2025, only a Volkswagen company plans to produce 3 million electric vehicles a year. The batteries of these cars (except for batteries used in homes, businesses, and utilities) will have to have a corresponding source of supply.
Here's a short guide to help unlock the mystery of today's battery shortages and falling prices.
Korean-made batteries may only remain in the country.
A key part of the battery production bottleneck may be in South Korea.
Driven by the South Korean government's electricity price discount for companies using battery storage systems, South Korea's storage capacity last year exceeded any previous year. Bloomberg New Energy Finance predicted in a report in September that South Korea’s battery storage is expected to reach 3.7 billion watt-hours by the end of this year. A large part of the battery capacity comes from Samsung SDI and LG Chem in South Korea, and the two leading international battery manufacturers have already shown signs of their products being sold preferentially in their home countries.
This may be one of the reasons for the supply problems faced by US buyers, who often rely on batteries made in Korea. According to Yayoi Sekine of Bloomberg New Energy Finance analysts, nearly 60% of utility batteries deployed in the US last year were produced by Samsung SDI and LG Chem.
Larsh Johnson, chief technology officer at Stem, one of the largest battery and energy storage companies in the United States, said: "The global battery market is definitely a bit nervous. This is one of the reasons we are looking for new suppliers."
Can't rely on Tesla's super battery factory
Tesla is well received by the American public. The company's super-factory-based batteries in Nevada are used in home electrical energy storage and utilities in addition to electric vehicles. At present, the company is in a leading position with Panasonic's battery cores, and has produced or planned to produce a battery capacity of 105 billion watt-hours.
For Tesla's energy storage products, public demand is growing rapidly, and such products are far less concerned than Tesla's cars. In the United States, household energy storage has been increasing rapidly. The installed capacity in the second quarter of this year was more than last year. Tesla is also selling its Powerwall products to residents.
According to Yayoi Sekine, battery shortages can be seen by Tesla's “choose and choose who they want to deliver to”, but Tesla is not delivered to each party. (This Tesla did not respond.)
Tesla and South Korean battery manufacturing giants are expected to enjoy strong demand together.
"LG, Samsung and Tesla will have a glorious year in the battery space," said Geoff Brown, president of Oregon energy company Powin Energy. But he also said that there will be new competitors, because "demand will generate demand from new suppliers."
In fact, the above example of Powin Energy shows that in addition to these three suppliers, new demand will drive new suppliers. The company's products feature batteries from China.
Thanks to the rise of China, battery prices have not risen sharply.
Although the current short-term supply shortage has forced some battery buyers to pay a premium, the average price this year has declined. The Bloomberg New Energy Financial Report mentions a number of factors: from limited supply, to long-term delivery times by Korean suppliers, to rising commodity prices for lithium and cobalt in batteries, and to trade disputes between the United States and China. Can push up the average price of the battery.
The reason may be simple. Wood Mackenzie's Boston-based analyst Brett Simon said new production capacity is rapidly increasing, especially in China, where battery packs from major manufacturers are accommodating higher energy densities. . Yahoo Sekine of Bloomberg New Energy Finance believes that China will have enough capacity to produce batteries in the next three years to meet the global demand for batteries.
In Ningde era, a new factory with a capacity of 24 billion watts is being built near the headquarters of Fujian. The company also established a joint venture with SAIC in Jiangsu with a planned capacity of 36 billion watt-hours. The company also said that by 2020, the total power generation capacity will be increased to 50 billion watt-hours.
BYD, which competes with China's largest battery manufacturer for the Ningde era, has also built a new 24 billion watt-hour factory in Qinghai, China.
He Long, vice president of battery business at BYD, said that the company expects total battery production capacity to reach 28 billion watt-hours this year and will further increase to 60 billion watt-hours by 2020.
Korean battery giants will also expand production. A spokesman for LG Chem said that the company expects its electric vehicle battery capacity to increase from 18 billion watt-hours at the end of last year to 90 billion watt-hours by 2020, an increase of five times. He declined to comment on the possibility of a total battery shortage. Samsung SDI also revealed that the company will continue to increase production capacity while meeting demand.
However, although the world is waiting for battery capacity to increase, the current imbalance between supply and demand has slowed down the rate of cost reduction. However, it is this slowdown in price cuts that has made today's battery boom possible. According to Wood McKenzie, the total price of lithium-ion battery assembly fell by 7% this year, down from the previous forecast of 14%.
For Stem Energy's Johnson, this situation has not caused the price to rise. He said that this is more due to the pause in the pace of cost reduction, but it will not last long.
Wood Mackenzie expects that by the end of 2020, the cumulative production capacity of lithium-ion batteries will increase from 1980 billion watt-hours at the end of this year to 346 billion watt-hours. Simon said that most of the production capacity will come from China.