Smarter Energy: Lowering Costs and Enhancing the Density, Building a leading enterprise with 21700-Battery
Recently, convened by the Ministry of Finance, China’s National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Science and Technology, National Energy Administration and representatives from related industries discussed the subsidy adjustment programme of new energy automobile (NEA) in 2018. According to the current information, the NEA subsidy policy has been adjusted in the following three aspects: The classification of endurance mileage will be more specific, the requirement of battery energy density will be increased, and the subsidy based on energy dissipation coefficient will be provided. The industry experts all hold the opinion that China’s willing to support the sustainable and sound development of NEA industry has never changed. Since this year, the production and marketing of NEA have changed continually under the policy support. Next year, the subsidy is expected to be slashed, but the industry will be standardized, and the flagship enterprises will be nurtured in the long run. In fact, the requirement of high-energy density will undoubtedly promote the development of ternary Li-ion battery industry. The power battery enterprise who could give priority to improving the energy density and reducing the cost is hopefully to gain the market share in the market reshuffle.
Far East First New Energy Co., Ltd. (referred to as “Far East First”), the professional enterprise of Li-ion battery, was established in July 2009 as the wholly-owned subsidiary of Far East Smarter Energy Co., Ltd. (referred to as “Smarter Energy”, stock code: 600869). The company’s daily production capacity of 18650-battery is 1.2 million, with 3GWh stored energy. Cooperated with Jiang Ling, Dong Feng, Zotye, Chery, Shaanxi Tongjia Automobile and other NEA manufacturers, it has reached the sales volume of 50 thousand in power battery. In 2016, the sales value of Far East First exceeded RMB 1.1 billion with RMB 100 million as the tax amount. According to the expectation of Shenzhen Gaogong Industry Research Co., Ltd (GGII), the company’s capacity and output value will keep increasing in 2017 and realize the sales value of over RMB 1.5 billion and RMB 130 million worth of net margin in power battery, and thus becoming a strong competitor in domestic power battery market.
Under the background that the price of raw materials keeps increasing and every market participant is pursuing lower costs, those engaged in power battery are shouldering heavy pressure. Among them, Smarter Energy (600869) has largely increased the production efficiency, reduced the labor cost and operation cost by creating an automatic and intelligent production line with imported full-automatic equipment. Such production line has taken use of the techniques of automatic battery pole piece production, full-automatic coiler, full-automatic battery cell assembling, cleaning, aging testing, grading and packing, so it enjoys the advantages of automation, high-level intelligence, high finished product rate, dependability and good uniformity compared with other battery production and assembly methods, home and abroad.
This year, according to the market demand and its strategic planning, the company started the R&D and industrialization project with an annual output of 3GWh of high-energy density Li-ion power battery, with a total investment of RMB 3.889 billion. Focusing on the 21700-battery (the upgraded product of 18650-battery), the company is striving to build China’s first full-automatic 200 PPM cylindrical 21700-5Ah production line. The targeted customers of the new version are the entire automobile manufacturers of well-known brands. In the future, it will combine the R&D development mode based on such manufacturers’ demands and start from the functions of entire automobiles, thus defining the model and style of 21700-battery. Among the existing mass-producible batteries, 21700-battery boasts the highest energy density and the lowest costs. Its energy density is over 20% of the former cylindrical battery while its costs have reduced by about 9%, thus reducing the Pack weights of batteries.
Smarter Energy (600869) is striving to be China’s leading solution provider in NEA and energy storage. Facing the future, the company has made the following three targets: Perfect and enhance the current business and to be the top 1 globally in 18650-battery; reinforce the cooperative integration with its subsidiary corporations, develop BMS (Battery Management System) and battery cloud business, and seize the traffic data flow entry; give play to the gradient utilization effect of batteries, develop energy storage business and grasp the global future trend.
It is worth mentioning that the company has completed the construction of 3MWh micro-grids project this August, which has been put into operation. And the new 16MWh micro-grids project is now starting. In October, it also completed an environment-friendly and energy-saving demonstration sample project, which will realize the systematic gradient utilization of packs and modules of batteries. It has also created a gradient utilization solution for battery packs. All have laid a foundation to realize a municipal demonstration project.