Lithium Battery Enterprise: Technical Breakthrough Key

In recent years, some power battery companies are transforming themselves into power tool batteries. According to the person in charge of the enterprise technology department, product reliability is the key to the development of the industry. At present, the technology research and development of some scientific research institutes is actually out of line with the market, and the enterprises do not have the strength to conduct research and development.

Severe overcapacity <br> <br> reporters a few days ago research found that in the Fifth China (Shanghai) International Battery Industry Exhibition, overcapacity has become more than business heart. In order to seek a turnaround, there are power battery companies considering product transformations, such as making small power tool batteries. The survey materials provided by the person in charge of the Ligong Lithium booth to the China Securities Journal reporter reflect to some extent the status quo of the industry surplus. The key materials of lithium batteries include positive electrodes, negative electrodes, electrolytes, and separators. Due to the limited demand for expansion, there are excesses in many links.

According to the research of Ligong Lithium Battery, as of June 2013, there are 171 cathode materials manufacturers in China. The cathode materials mainly include lithium cobalt oxide, ternary materials, lithium manganate, and lithium iron phosphate. Among the 171 companies, 52 companies produce more than two kinds of cathode materials. Lithium iron phosphate materials have the most serious excess capacity. The overall capacity utilization rate is less than 10%, and most of the companies suffer losses. In addition, the average price of negative electrode materials, natural graphite and artificial graphite, has declined since 2010. Affected by excess capacity and downstream impact, it is expected that the average price of negative materials will maintain an annual decline of 5%-10% in the next three years.

On the diaphragm side, due to the limited growth in demand, coupled with the increase in new production capacity in 2012, the price of diaphragms has fallen sharply this year. With overcapacity and price declines in cathode materials and separators, funds have turned to electrolytes with relatively stable gross margins. However, as production has increased and demand is weak, electrolyte prices have also fallen.

The drop in material prices caused the price of lithium batteries to drop. In the first half of this year, the average price of China's lithium battery cores dropped significantly, and the price of core batteries in the low-end market dropped even more. Low-end market prices are confusing, and there have been 1AH battery packs with unit price less than 4 yuan. Gaogong Lithium Industry Research Institute predicts that the price of lithium batteries will continue to decline as the company's production costs decline and market competition intensifies in the coming years.

The drop in the price of key materials for lithium batteries also began to affect the profitability of the listed companies. Xinzhou State’s main products include electrolytes, which it stated in its semi-annual report that lithium-ion battery chemicals have experienced a sharp decline in product prices due to intensified industry competition. Although sales volume has increased, operating income still fell 8.19% year-on-year. China Aviation Lithium Power Co., Ltd., an integrated subsidiary of Chengfei, is responsible for the lithium battery business. In the first half of the year, Chengfei’s integrated lithium battery, power system and accessory products revenue increased by 85.64% year-on-year, but due to falling prices, gross profit margin decreased by 17.1 percentage points year-on-year, resulting in overall company gross profit margin. Compared with the same period of last year, it decreased by 5.62 percentage points.

Technological breakthroughs into key <br> <br> companies believe that industry overcapacity, the main reason is not because of demand, but because of lack of technology. Shenzhen Xin Yong Feng Technology Co., Ltd., which specializes in power battery industrialization technology and related products, Liu Lijun, the company's technical director, said in an interview with the China Securities Journal that the lack of battery reliability is the main reason for the downturn in the entire industry. The reason for the lack of reliability is not because the battery production equipment is not good, but the battery structure design is unreasonable, which brings many hidden troubles. In use, these hidden dangers are exposed, causing consumers to have no confidence in the product and creating a vicious cycle.

The recent lithium battery accidents, in his view, the fundamental reason is the irrational design of the battery structure, the gap between the positive and negative lithium batteries cause structural instability, and ultimately problems. He believes that the structure of the single battery, the positive and negative pieces to do tight fit, reduce parallel connection, use more large batteries in series. In terms of tight coordination, Japan is currently doing a better job.

Liu Lijun also pointed out that the current development and production of lithium batteries are out of touch. He said that after all, the product is a factory, and the battery production process is critical, but some research institutes do not understand the industry very well. The final problem is that the research institutes have taken the funds to do what they think is valuable, and they are actually out of touch with the market. Enterprises do not have sufficient funds for R&D. Many factories are under pressure from business and do not have the strength to make technical reserves.