SHANGHAI, June 25, 2021 /PRNewswire/ -- With the evolving
landscape of the global automotive industry, Cango Inc. (NYSE:
CANG) ("Cango" or the "Company") is issuing a bi-monthly industry
insight called "CANGO Auto View" to bring readers, drivers and
passengers up to speed with what's on offer in the automobile
market, what trends are emerging, and what holes need to be
plugged.
Below is an article from the Company's 3rd edition for
February 2021.
New Energy Vehicles (NEVs) that are currently on the market are
mostly powered by lithium batteries. Accounting for more than one
third of the cost of the entire vehicle, the power battery is the
core factor that dictates a vehicle's performance.
Due to the rising energy density bar for subsidies for power
batteries and consumer preference for long-range vehicles, the
superior-energy-density ternary lithium battery is the current
market leader and is being installed in more and more vehicles from
year to year.
Besides the ternary lithium battery, the lithium iron phosphate
battery, the lithium-ion battery, the lithium manganese oxide
battery and the multi-element composite lithium battery also have
significant market share. In terms of trends, all power battery
companies are trying to enhance battery energy density by improving
material systems and light-weighting.
With that in mind, auto original equipment manufacturers (OEMs)
are accelerating the deployment of their power battery businesses.
In 2017, Toyota and Panasonic established a joint venture called
Prime Earth EV Energy, focusing on prismatic batteries for hybrid
vehicles. In 2019, the two parties joined forces again to set up a
vehicle battery joint venture that would seem them working together
to develop and produce high-capacity batteries for Electric
Vehicles (EVs), and mass produce them by 2025.
In 2019, Toyota also established formal partnerships with CATL
and BYD in an open cooperation in the field of pure electricity.
The partnerships will not just be limited to the supply of power
batteries, but will also cover battery recycling and the
development of pure EVs.
In 2020, in collaboration with scientists from Kyoto University, Toyota developed a new fluorine
ion battery, with energy per unit weight approximately seven times
that of a traditional lithium-ion battery, and one charge
delivering a range of 1000km. According to Japanese media reports,
this joint team has successfully developed a rechargeable prototype
of the battery using solid electrolytes, with the cathode made of
fluorine, copper and cobalt and the anode made mainly of
lanthanum.
In 2019, Volkswagen also invested in a lithium battery company
called Northvolt to mark its entry into the power battery business.
The Volkswagen Group plans to invest 900
million euros in battery R&D in collaboration with
Northvolt for the mass production of batteries. Northvolt benefits
from strong investment endorsement from government agencies and
large-scale enterprises, having received more than 1.4 billion euros to date.
Volkswagen's heavy investment in Northvolt is related to the
global manufacturing footprint of high-end power batteries.
Currently, the main high-end battery technology is owned by a
handful of companies including Panasonic, CATL, Samsung SDI, LG
Chem and SKI. In order to control such a core part as power battery
and to ensure supply chain security, auto companies are driven
towards extensive investment and collaboration with power battery
companies.
Tesla is no exception. In 2019, it announced the acquisition of
supercapacitor maker Maxwell at a 55% premium, for 218 million US dollars. By absorbing external
technical teams to focus on deploying in battery technology in the
future, Tesla is also further ramping up coordinated development
with energy storage business and solar technology. Maxwell's
high-energy, high-density batteries and its engineering design for
battery pack and chassis will help Tesla achieve even lower energy
consumption and longer driving range for its
products.
Breakthroughs in battery technology are a hot topic for
carmakers. In 2020, GAC Group announced it was continuing research
into the graphene battery, saying it expected to pilot mass
production for real vehicles by the end of this year. Whether mass
production can happen eventually will be determined by the test
results.
The graphene battery developed by GAC can reportedly be charged
with 80% full power within eight minutes, implying that a 10-minute
charge can translate into driving range of 200-300kms. This
charging speed is comparable to gas refueling. GAC is currently
running preliminary tests for the graphene technology on multiple
levels including battery cells, modules and installation on
vehicles. Based on previous plans, the graphene super-fast charging
battery will be mass produced and installed on the Aion series of
vehicles.
Independent domestic brands are also fully deploying the power
battery industrial chain. Take GWM for example. SVOLT was set up to
help GWM resolve issues such as scarcity of high-end power battery
cell production capacity. Outside China, SVOLT has invested a total of
2 billion euros to build factories in
Europe with a total production
capacity of 24GWh. It has also announced the establishment of a
module PACK factory and a battery cell module factory in Saarland,
Germany. The former will be in
production as early as the second quarter of 2022 and the latter at
the end of 2023.
In terms of more cutting-edge battery technology reserves and
development, SVOLT leverages the Wuxi 118 Global Lithium Battery
Innovation Center as its platform, and is exploring new lithium
technology for the next decade through preliminary development of
technology and products including all solid-state battery, capsule
battery, self-gassing battery and hybrid cathode materials.
Mathew Effect in the continuous breakthroughs in battery
technology
Judging by the intensity of investment from major manufacturers,
this arms race in terms of battery technology is far from over. For
one, cost is one of the most important considerations for power
batteries. Costs have been dropping thanks to years of
technological development, with battery prices currently one fifth
of what they were ten years ago, and the cost of battery as a
percentage of whole vehicle cost dropping from 60% from five years
ago to 30%-40%. Still, since price parity is the most important
factor restricting the deeper penetration of EVs, battery cost
still relies on continuous breakthroughs in materials, scale and
technology.
For instance, finding low-cost material systems, reducing the
use of parts, and developing batteries that do not use precious
metals or use metals at all is essential. Cobalt is a rare earth
metal that is indispensable to the positive electrode of ternary
lithium material, and the demand for it will keep rising with the
rapid development of NEVs.
The earth's cobalt content, however, is relatively low. Limited
cobalt resources dictate high prices of the metal, and supply might
fall short of demand in the future. Confirmed terrestrial cobalt
resources worldwide are 25 million tons and reserves 7.2 million
tons. Global cobalt resources are actually very unevenly
distributed, with cobalt reserves highly concentrated in
Congo (DRC), Australia and Cuba. To be more specific, the combined cobalt
reserves of those three countries account for 68% of total global
reserves.
Being cobalt-free is one of the common goals in the research and
development of power battery material systems. In 2020, an
executive from CATL revealed that the company is developing a new
type of EV battery that does not contain nickel or cobalt. Nickel
and cobalt are key components of the battery that powers EVs. Many
battery manufacturers including Panasonic in Japan and LG Chem in South Korea are reducing the amount of the
expensive cobalt used in NCA or NCM batteries. Moreover, CATL is
developing a separate technology to directly integrate batteries
into the frame of an EV so as to increase its driving
range.
In May 2020, SVOLT, a battery
company under GWM, debuted the NMx cobalt-free battery it had
developed. Through the cation doping technology, single crystal
technology and nano-networked packaging, this battery has
significantly improved nickel-lithium ion mixing and cycle life in
the absence of cobalt, suggesting the possibility for cobalt-free
materials to overcome these key obstacles and reach the stage of
large-scale applications.
Besides rare metals, battery materials are one of the focuses
for the major manufacturers in their business deployment.
Currently, cathode materials used for lithium power batteries in
NEVs include ternary materials, lithium iron phosphate, lithium
manganese oxide and lithium cobalt oxide.
CATL, for example, has chosen to focus its investment on the
production of cathode materials and lithium resources required for
the production of cathode materials. In September 2019, it announced the plan to purchase
8.5% of the shares of Pilbara which is a lithium mining company in
Australia. And in April of the
same year, it announced that its subsidiary CATL Bangpu would
invest in the construction of production capacity of 100,000
tons/year of nickel cobalt lithium manganese oxide cathode
materials.
In the raw material supply chain, the competition to integrate
upstream resources is particularly fierce. Take Gotion High-Tech
for example. Since its establishment in 2006, this power battery
company has dedicated itself to the independent development,
production and sales of lithium power batteries for NEVs. In 2019,
the company's power battery installation volume was 3.2GWh which
translated into a domestic market share of 5.2%, ranking third in
the country, after CATL and BYD. Of the 3.2GWh, lithium iron
phosphate batteries accounted for 2.9GWh, ranking second in the
country.
As of now, Gotion High-Tech has deployed batteries in nickel,
cobalt and lithium resources as well as the four major raw
materials for batteries (cathode materials, anode materials,
separator and electrolyte) to further enhance its own cost
advantage. Its subsidiary Gotion Precision Coating Materials Co.,
Ltd. has started mass producing carbon-coated aluminum foil, and is
collaborating with MCC to develop ternary precursor materials and
with Tongling Nonferrous Metals Group Holdings Co., Ltd. to develop
copper foil, and co-investing with Shenzhen Senior Material
Technology Co., Ltd. in separator development and with Shanghai
Electric to enter the energy storage field.
In terms of clients, Gotion High-Tech has established strategic
partnerships with a large number of outstanding domestic vehicle
companies including BAIC, SAIC, JAC, Chery, Changan, Geely and
Yutong. At the same time, the company is accelerating its
internationalization. It has entered the Bosch global supply chain
system and set up a joint venture with Tata in India to develop the Indian lithium battery
market. On May 28th, 2020,
Gotion High-Tech announced the plan by Volkswagen China to make
strategic investment in the company.
Competition on the technical level is even more complicated, and
there were times when multiple technical routes were taken. Take
battery packaging for example. It is one of the key technologies
that affect battery safety and life. Based on market analysis
reports, since power battery products are used in different
scenarios, impact resistance, vibration resistance and resistance
against mechanic shocks such as squeezing and puncturing are one of
the requirements for battery packaging. In addition, battery
packaging needs to meet chemical requirements such as fire
retardant requirement and immersion requirement, and to meet
lightweight and wiring requirements in terms of design. Therefore,
power battery packaging does have a certain technical
threshold.
Power battery research has shown that at present, based on the
sub-assembly technology, power batteries can be divided into three
types, namely, prismatic battery, cylindrical battery and soft pack
battery. And each has its advantages and disadvantages.
1) A prismatic battery, as the name suggests, refers to a
single battery made into a prismatic shape. Compared against
cylindrical packaging, the prismatic shape narrows the gap between
cells and allows internal materials to be rolled more tightly. As a
result, the battery will not easily expand when restricted by high
hardness, which is relatively safe. Moreover, the shell is made of
aluminum-magnesium alloy which is lower in density, lighter in
weight and higher in strength, thus enhancing the battery's energy
density and safety and range.
2) Both cylindrical batteries and prismatic batteries come
in hard shells, but the cylindrical packaging distinguishes itself
with its small size, flexible grouping, low cost and mature
techniques. At present, the Panasonic batteries used in Tesla's
pure EVs are hard-shell cylindrical batteries. In later stages,
however, the cylindrical battery will face issues such as difficult
post-grouping heat dissipation design and low energy density.
3) Although the soft pack battery has advantages such as
flexible size change, high energy density, light weight and low
internal resistance, it also has disadvantages such as poor
mechanical strength, difficult sealing process, complex grouping
structure and difficult design. Even in cost, consistency and
safety, it is of average performance.
At present, prismatic packaging is the most common battery
packaging in China. Of the three
different shapes of battery, namely, prismatic, cylindrical and
soft pack, prismatic batteries still dominate the market and are
the only technical route maintaining an YOY increase in 2019. In
2019, the installation volume of prismatic batteries was 52.73GWh,
which was a YOY increase of 24.8% and accounted for 84.5% of the
total installation volume.
The three companies with top installation volumes are CATL, BYD
and Gotion High-Tech. An oligopoly effect has been formed in this
field, and studies suggest that the leading position of prismatic
batteries will not change in the short run.
Furthermore, most major technological breakthroughs are
accredited to leading companies. Take the efficiency of battery
packs for example. In a traditional battery system, the costs of
the battery's internal structural parts and packs are relatively
high. Non-modular technology is expected to improve battery pack
design, enhance battery pack efficiency, and optimize layout,
structure, topology and low-density materials, thereby reducing
costs.
In September 2019, CATL launched
the CTP technology at the Frankfurt Motor Show. With the CTP
technology, the volume utilization rate of battery packs can be
improved by 15%-20%, the number of battery pack parts reduced by
40%, and the energy density of battery packs increased by 10%-15%
to above 200Wh/kg. At the same time, the number of intermediate
links can be minimized, production efficiency improved by 50% and
production cost of power batteries dramatically reduced.
In March 2020, BYD introduced its
new-generation blade battery. With increased length, the battery
cells are flattened. And with the densely arrayed cells acting as
structural parts themselves, sufficient strength is maintained to
provide support, thus eliminating part of the traditional battery
pack's protective structure and improving the space utilization
rate inside the battery pack shell from 40% of the tradition design
to 60%. At the same time, the new blade battery features further
improvements in battery life, range, safety performance and
grouping efficiency, and its cost has been reduced by 20%-30%.
More technological breakthroughs are likely on the horizon, and
solid-state battery technology, for one, is widely touted to be the
next-generation power battery technology as the number of related
patents has increased by more than tenfold over the past decade.
But the power battery industry overall features high barriers to
entry due to factors including large-scale investment required by
the industry, long R&D input-output cycles and technical
barriers. With time, competition among power battery companies will
become more heated, and an industry reshuffle will be accelerated.
The future will be exciting to behold.
About Cango Inc.
Cango Inc. (NYSE: CANG) is a leading automotive transaction
service platform in China
connecting dealers, financial institutions, car buyers, and other
industry participants. Founded in 2010 by a group of pioneers in
China's automotive finance
industry, the Company is headquartered in Shanghai and engages car buyers through a
nationwide dealer network. The Company's services primarily consist
of automotive financing facilitation, car trading transactions, and
after-market services facilitation. By utilizing its competitive
advantages in technology, data insights, and cloud-based
infrastructure, Cango is able to connect its platform participants
while bringing them a premium user experience. Cango's platform
model puts it in a unique position to add value for its platform
participants and business partners as the automotive and mobility
markets in China continue to grow
and evolve. For more information, please visit:
www.cangoonline.com.
Media Contact:
Juliet Ye
Cango Inc.
Tel: +86 21 3183 5088 ext.5581
Email: pr@cangoonline.com
Twitter: https://twitter.com/Cango_Group
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SOURCE Cango Inc.