In the year 2023, when there is relative overcapacity and intense competition, where are the new opportunities and growth for power battery companies? This is an important question facing power battery companies. By examining the reflections and practices of leading companies in the industry, such as CATL (Contemporary Amperex Technology Co., Limited), we can learn some methods and experiences.
Recently, Wu Kai, the chief scientist of CATL, stated at the International Forum on New Energy Science and Transportation Electrification that China's power batteries have already achieved global leadership at the current stage. To maintain this leadership, companies need to have a unified consensus and ensure sustainable development of both leadership and the industry. This requires power battery enterprises to possess "new quality productivity".
The concept of "new quality productivity" requires that it be new and of high quality. Traditional productivity requires a large amount of resource input and generally consumes a lot of energy. New quality productivity undoubtedly requires improved efficiency and quality. The research and development of power batteries in the new energy industry involve high-tech materials. Firstly, large-scale production is required for effective results. Secondly, there is high heterogeneity. These characteristics determine that this industry needs to accelerate the formation of new quality productivity.
In Wu Kai's view, power batteries have great application potential in the fields of land, sea, and air transportation. Therefore, battery companies need to improve the quality of their productivity to seize these opportunities.
What new opportunities does comprehensive electrification bring?
Looking at the application in land, sea, and air transportation, land transportation electrification is "hitting the accelerator".
In the field of new energy vehicles, there are two driving forces. Firstly, the annual penetration rate of passenger cars is significantly increasing, and the market has shifted from being policy-driven in the past to the current market-driven stage.
Secondly, electrified vehicle models have achieved comprehensive coverage across various scenarios, including road passenger transport, urban delivery, heavy-duty transportation, and construction machinery. Initially, the battery market was dominated by China, Japan, and South Korea, but China has gradually taken a substantial lead. In recent months, even if we exclude the Chinese market's power batteries, CATL is still in the first position in the overseas market.
The maritime transportation sector has pressed the "start button." While there are over 35 million ships globally, only 586 of them are certified electric ships. Recent years have seen a significant increase in shipments of lithium batteries for maritime use. For example, electric ships are present in the Yangtze and Pearl Rivers, and overseas locations like Singapore are interested in samples of ship batteries. Some institutions predict that by 2050, China's demand for lithium batteries in electric ships will exceed 11 GWh.
The airspace situation can be described as being in a "standby" mode. Recently, four ministries jointly released the "Green Aviation Manufacturing Industry Development Outline," outlining the industry's development path. In the first half of this year, CATL released a new solid-state battery with a single-cell energy density of 500Wh/kg, achieving a high proportion of battery performance and safety. This battery, with its high cost, is currently suitable for the aviation field. The company is collaborating on the development of civilian electric aircraft projects. The company's aviation standards and tests adhere to industry guidelines. The first sample has been successfully delivered, and the second one is scheduled for the end of this year, showing promising results in internal testing.
In summary, the power battery industry is expected to enter the "TWh" era this year, surpassing the previous years' several hundred GWh to approximately 1TWh. According to various forecasts, the installed capacity of power batteries is expected to exceed 5TWh by 2030, indicating significant potential for the electrification market.
How to Form New Quality Productivity?
Innovation is the key; strengthening core innovation capabilities requires high investment, strong talent, a focus on patents, and extensive collaboration.
Additionally, a quick transition to digitization and intelligence is crucial, particularly in the valuable battery industry. For instance, the vast combinations of materials require mathematical models to accelerate the selection process from millions of materials. Algorithms can iteratively optimize and enhance results continuously.
What is the Decisive Factor in the Next Stage Competition for Power Batteries?
Material research and development will be the decisive factor in the next stage of power battery competition.
Firstly, beyond materials, simulations and modeling are required for the practical application of electrochemical positive and negative electrode materials and battery cells. Previous battery product development relied on simple tests, such as safety abuse tests, vibration under certain conditions, and impact tests – often static simulations of a few parameters.
However, real-world extreme scenarios, like vehicle fires, are typically rare and multifactorial, involving multiple elements rather than a single factor. Dynamic testing around the entire lifecycle of the battery, considering actual usage scenarios, is crucial. The company has designed targeted tests for various issues consumers may encounter, such as impacts on the bottom of the vehicle during driving or water ingress during heavy rain, rather than a singular static test.
Secondly, battery development must not be limited to a specific usage stage but should consider the entire lifecycle globally.
The purpose is to maximize the battery's value, emphasizing the need to strengthen battery recycling efforts for environmental and economic benefits.
Thirdly, exploring incremental utilization is essential. Incremental utilization is valuable in electric vehicle use, akin to squeezing every drop of oil. Companies producing higher-quality batteries with only 20% degradation can utilize the remaining 80% for additional purposes. This approach maximizes the value of the battery and reduces costs.
The research and development of new quality productivity must be vigorous. Although increasing battery costs are minimal, they can significantly enhance various performance aspects. For example, a 5% increase in cost can double the battery's lifespan, representing substantial value. Therefore, collaborative efforts within the industry are crucial for this promising venture.
How Does Battery Innovation Integrate into Multiple Industries?
Batteries are becoming a foundational and supportive unit in the new energy system, necessitating deep collaboration across various sectors.
For example, energy supplementation is a critical aspect for users, with a desire for fast and supercharging capabilities similar to refueling. Another method is battery swapping. Why is CATL actively promoting battery swapping? Aside from the benefits of battery swapping, it addresses the high cost issue in electric vehicles, mainly attributable to the high cost of batteries. By allowing users to lease batteries instead of purchasing them, significant cost savings can be achieved. However, battery swapping requires careful consideration, and it is essential for the market competitiveness of this business model. As long as longevity is addressed, this business model has a bright future.
Battery swapping also brings an additional benefit. As mentioned earlier, incremental utilization of batteries maximizes their value, and if lifespan concerns are alleviated through battery swapping, there is no need for retirement. In the battery swapping business model, incremental utilization is not a problem since the battery is continuously in use, making it a highly competitive market direction. As long as longevity is addressed, this business model has a promising future.
What is the Necessity of Battery Integration?
Why is CATL willing to integrate intelligent chassis systems? The company's goal is to decouple the chassis from the upper body, not only structurally but also in terms of cost. The company aims to shorten the development cycle of entire vehicle manufacturers. For instance, the development of a new car originally took 3-4 years, but with this integrated product, it can be developed within a year.
What Challenges Remain in Achieving High Energy Density for Power Batteries?
There are various routes for achieving energy density in batteries, and they can coexist without conflict. One currently popular route is solid-state batteries, which offer high energy density. For instance, the aviation sector also employs similar methods to achieve 500Wh/kg, and CATL is actively working on research and development in this area. Mass production may be possible between 2027 and 2030.
However, there are still challenges:
Firstly, the issue of lithium dendrites. The growth of lithium dendrites is a significant problem, and a short circuit can lead to failure. CATL has developed interface enhancement technology to make lithium dendrites relatively uniform, preventing their formation. The company has achieved good results, allowing the battery density to reach 20 milliampere-hours per square centimeter without forming lithium dendrites.
Secondly, the issue of solidity. As everything is solid-state, particle materials may separate, increasing density. CATL has developed dual-phase conduction network technology, significantly enhancing the stability of the solid-state interface. According to laboratory data, fully solid-state batteries can achieve 6,000 cycles in small cells. However, when the cells are enlarged, it is currently not feasible. Nevertheless, the company is gradually addressing these challenges and is confident in overcoming them, continuously making breakthroughs in new technologies.
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