“Tesla” drived the investment booming for the upstream industry of lithium electricity, but as the people like us really in the business, we should think more calmly under such circumstance.
Although the threshold of lithium electricity industry is not low, but dreaming of the outbreak of the new energy vehicles, new entrants are many. Especially the domestic manufacturer of lithium battery electrolyte, the numbers were from 10 or so, two years ago to thirty or forty, or even more , and there are a lot of funds pouring into.
The result of disorderly competition is the price, prices falling become a trend. The rules of the whole industry rules have changed. So in 2013, there is a certain amount of growth on sales of lithium battery electrolyte, but drop of prices could be more than 20%.
In addition to the fierce competition, if power battery want to be more popular , you need to reduce its costs, so to the upstream raw material suppliers. At present, the prices of the upstream suppliers of the electrolyte, the diaphragm and other materials still have a large space to be cutting down, the gross margin, net profit margin of those suppliers will be dropped. Net profit margin of Capchem now is maintained at 15% ~ 20%. But with development of the industryl in the future ,the market will be more mature, it would be reasonable that the net profit margins of the whole industry remain at around 10% .
Electric vehicle is an opportunity, but a lot of uncertainty is still exist. National policy really support the development of electric vehicles, whether from domestic battery car industry, or judging from the reaction of our customers, the prospects of electric car industry are very optimistic.
However, industry in short and medium-term is highly uncertain. Such as if the frequent safety accidents occur during the period, the market confidence may be harmed, but if the government continues to support the industry with good policies, the market will have hopes for it. In the medium term, the time for the fast development of the industry will be more and more close, but how long it will last?, maybe just a few years, maybe decades.
So where is the industry's growth? I think in addition to electric vehicles, there are still two visible logic in the current industry : the growth of the two alternatives.
Lithium battery electrolyte industry are mainly distributed in China, Japan and South Korea, Europe and the United States also have some, everybody is constantly expanding the capacity of production. When the large scale manufacturing period comes, the most optimal cost is in China , so many enterprises are transferring the focus to China. At present, the volume of electrolyte in China accounted for about 50% of the world, there are still some alter native space.
Another alternative is the replacement of lead-acid batteries. Compared with the conventional lead-acid batteries, lithium ion battery has many advantages such as small volume, light quality, high working voltage, more energy, long cycle life, no pollution and safety performance. The current electric bicycle and communication base stations, and other fields, are basically using lead-acid batteries. Lead-acid battery market in China is about 100 billion yuan, this is the big opportunity for lithium battery industry.
Enterprises want to excel in the competitive environment, first of all , they must have scale advantage, improve efficiency, ensure supply capacity. In addition, attention should be paid to control the low-end market risk, have in-depth knowledge of product structure and the structure of the customer, so to adjust their production to the high-end market, not blind impulse to bargain for volumes.
Moore's law also apply to the lithium battery industry, the key for declining prices relies on technology innovation. The demand of New battery is higher and higher, especially in safety, capacity, power battery life and so on, all have high requirements, but the price must be lower, all these problems will be through technical means to be solved. And is the Lithium Hexafluoroarsenat the best solution for lithium battery electrolyte? Not necessarily. Is there any new material can replace it? The answer is entirely possible.