china's ev battery industry could be a repeat of solar and rare earth dominance - 18650 battery manufacturers

We all know what's going on in the solar industry.
In 2001, solar panels produced in China accounted for only 1% of global production.
In 2012, China's solar panel production accounted for 58%.
The picture below shows a shift in global dominance.
In 2015, Chinese manufacturers accounted for five of the top 10.
In 2015, two Taiwanese companies entered the top 10, while none in 2014.
With the rise of Chinese solar makers, hundreds of competitors have closed down.
The list of solar manufacturers compiled by GTM, as shown below, are either closed or acquired by other manufacturers.
Someone might ask, how does this happen?
New product boom from low-
Chinese manufacturers pushed down panel prices sharply and squeezed margins.
The cost of making solar panels in China is about 25% lower than in the US. S.
Because China's factories are four times larger than the United States. S.
Due to economies of scale, larger businesses can negotiate better contracts with suppliers and equipment can be used more efficiently.
But the real culprit is the cheap bonds provided by China's national development bank. CDB).
In 2010 alone, the bank posted a low of $30 billion.
Providing cost loans to China's top five manufacturers has enabled Chinese solar producers to grow to GW in a very short period of time.
Through a series of clever and systematic operations, China now has rare earth elements (NYSEMKT:REE)market.
Over the past 20 years, there has been a surge in demand for many items that require rare earth metals.
China uses its abundant rare earth resources and cheap labor to keep prices down to the point where almost all mines outside China are forced to close because they cannot compete on prices.
Because of the cheap labor, the quarrel has lost business in China.
In 2010, China cut its mineral export quota for hybrid cars and televisions by 72%.
Rising prices have triggered a huge expansion in China's production, including an estimated 40% of the country's industry's unregistered output.
At the same time, manufacturers are stepping up efforts to find ways not to use rare earths, to recover more rare earths from discarded products, or to exchange the most expensive rare earths for richer ones.
Prices plunged 2012, or 80%.
However, China still dominates the key supply chain.
Rare earth materials need to go through multiple processing stages before they are applied: according to industry estimates, rebuilding rare earth materials in the United StatesS.
The rare earth supply chain may take 15 years, depending on several factors, including ensuring capital investment in processing infrastructure, developing new technologies and obtaining patents, which are currently held by international companies.
China has about 50% of the world's rare earth reserves. in the past 20 years, due to some important factors, China has replaced the United States as the world's largest supply of rare earth.
China supplies 17 rare earth powders and metals, which account for 85% to 95% of global demand for high
Technology applications such as smartphones, catalysts, LED display screens, polished compounds, and ceramics.
The biggest use is for permanent magnets for wind turbines and hybrid electric vehicles, while metal alloys are becoming an area of growth, especially for hydrogen storage.
Over the years, the development of rare earth resources has been supported by the Chinese government (
Some sources even quoted Deng Xiaoping as saying that one day China will become "Saudi Arabia with rare earth ").
Is the electric vehicle battery industry the next battleground? Tesla (NASDAQ:TSLA)
Connect the electric vehicle business with the lithium-ion battery provided by Panasonic (OTCPK:PCRFY).
Tesla has used these batteries in a cylindrical 18650 format to power its Model S and Model X electric vehicles (
18mm in diameter and 65mm in length).
Lower cost considerations for Model 3
The pricing model forced Tesla to switch to the 2170 format (
Diameter 21, length 70)
But still with lithium nickel cobalt aluminum (Li1-xNiCoAlO2)(NYSE:NCA)
Chemistry, although some modifications have been made to further reduce costs.
I discussed the move in a sought-after Alpha called "Tesla's battery strategy is being implemented, but improvements may delay Model 3.
Tesla's new revelation of October 7, 2016
The $1 application for Panasonic has surfaced.
7 billion purchase commitment.
To put it simply, Panasonic purchased the battery manufacturing equipment and installed it at the Gigabit plant, but Tesla had to pay it back by purchasing the battery.
This makes me wonder if Tesla has stayed in Panasonic's Model 3 because Musk stared at the much needed $1.
7 billion check or Panasonic battery is the best choice.
Why should I mention this?
Keep in mind that there were rumors in May 2016 that Tesla was evaluating the batteries of LG Chemical and Samsung SDI.
The rumors have vanished, and Musk denied them.
The polymer bag battery of LG Chemical is used for the public (VLKAY), Ford (NYSE:F), Hyundai (OTCPK:HYMTF), Renault-
Nissan, Audi, Chevrolet, Kia (OTCPK:KIMTF), GM (NYSE:GM)
Daimler group (OTCPK:DDAIF).
Customers of Samsung SDI include Fiat (NYSE:FCAU)and BMW.
Both companies use lithium, nickel, manganese and cobalt (Li1-x(NiMnCo)O2)(NMC)chemistry.
But China's largest electric vehicle industry includes more than 200 manufacturers.
According to Bloomberg Technology, investors have invested more than $2 billion to build a new-Energy cars.
China surpassed the United States. S.
Became the world's largest new market last year.
Energy Car--
Including electric cars, plugs
Hybrid and Fuelcell cars.
According to the China Association of Automobile Manufacturers, in 2015, domestic automakers sold 331,092 vehicles (CAAM)
Sales in 2016 are growing at an alarming rate.
In the first seven months, the production and sales of new energy vehicles reached 215,000 and 207,000 respectively, up 119 year on year. 8% and 122.
According to CAAM, it was up 8% year on year.
One problem with Chinese batteries is chemical reaction.
LG and Samsung are producing lithium nickel manganese cobalt (Li1-x(NiMnCo)O2)(NMC)
As mentioned earlier, most Chinese battery manufacturers use lithium phosphate (Li1-xFePO4)(LFP)chemistry.
China has locked in the supply of raw materials for cobalt and lithium. Tesla's NCA and LG and Samsung's NMC batteries use cobalt in chemistry.
Most of China's production is ore and partially refined cobalt imported from Congo (Kinshasa).
China's supply has also benefited from domestic inventories of cobalt materials.
China is the world's largest consumer of cobalt, and the battery industry accounts for nearly 75% of its consumption. Freeport-McMoRan Inc. (NYSE:FCX)
On May 9, 2016, the company announced that it had reached a final agreement to sell its interest in TF Holdings Limited to China Molybdenum. , Ltd. (CMOC)for $2. 65 billion.
In addition, FCX agreed to negotiate exclusively with CMOC to reach a final agreement to sell its interest in cobalt in Freeport, including the Kokkola Cobalt Refinery in Finland, for $100 million, kisanfu exploration project in the Democratic Republic of the Congo is $50 million.
The purchase of Tenke mines illustrates how Chinese companies now dominate the field of battery materials, as they do with solar and rare earths.
If Tenco is acquired, Chinese companies will account for more than 60% of global refined cobalt production.
The price of the original cobalt is the main component of the Tesla/Panasonic NCA battery, and the current price is $26. 26 per kg.
The weight of the cell is 318 kg.
In compounds, the weight of Co accounts for 32% of the chemical measurement of the compound.
That means $3.
30/Wh is only for Co Cost of cathode.
However, the Co content of some ingredients is only 10%, which makes the price drop to $1. 00/Wh for Co.
With Chinese battery manufacturers from LFP (
I will discuss the reason in the article later)
For NCM without cobalt, we can expect the price of cobalt to rise.
In terms of lithium, sales of electric vehicles in China were higher than expected, causing lithium prices to triple between 2H15 and 2H16, although prices have slowed since then.
At present, China's lithium mainly comes from the Changtang plain in western Tibet.
The U. S. Geological Survey has set the country's lithium reserves at 3,500,000 tons.
China is taking action to expand the supply of lithium, just like cobalt.
China's Tianqi Lithium industry will build a $0. 306 billion factory in Australia, which is scheduled to open by the end of 2018 to expand its hydrogen oxide production for electric vehicles.
The green bush mine is operated by Talison Lithium, co-owned by Tianqi and lithium producer Albemarle, which accounted for more than 35% of global supply last year.
In 2012, Apocalypse defeated Rockwood Holdings, which controls Talison Lithium, which owns Australia's green bush mine.
However, it subsequently sold 49-
The company's percentage of interest on Rockwood now owned by Albemarle.
Like Apocalypse, Ganfeng is also buying lithium companies outside of China. It owns a 14. 7-
The shareholding ratio of junior lithium company International Lithium industry.
Ganfeng Lithium Industry Co. , Ltd.
Has agreed to purchase 100% of lithium from-
However, in the "Marion Mountain Project" in Western Australia, new metal resources have not yet been developed.
According to the new metals news, the annual output of Mount Marion will reach 5,500 tons, exceeding China's output (5,000 tonnes)
All the time in 2014In mid-
2016, Champlain Mineral received a large sample order from an unnamed Chinese mining company.
According to CBC News, the Asian company ordered 10,000 tons of lithium, equivalent to 340 containers, and the company expects to be able to ship by the end of October.
Chile has a large reserve of natural resources, and Chile's Quimica y Minera (ADR)(NYSE:SQM)
There is a large amount of foreign exchange reserves in northern Chile.
A Chinese company in CITIC Lyon Securities capital market has said it is interested in buying a 88% stake in Papa calihella, which holds a 20% stake in SQM.
China will have twice as much lithium as China.
As of 2020, the production capacity of ion batteries was the United States.
Nearly 70% of the world's demand for raw materials comes from China, the world's leading producer of lithium.
Ion battery manufacturers continue to expand capacity with the goal of becoming the lowest battery manufacturer in the worldcost producer.
The Chinese electric vehicle battery company originally used LFP chemistry, but is now changing to NCM.
Five of the top 10 are the best.
The electric passenger car models sold in China are NCM models. market.
Lee Shin, CATL, Day, Lee myung-bak has shipped NCM electric car batteries. Guoxuan Hi-
Technology and BYD will soon have them.
NCM battery in China is expected to be 1-
In terms of energy density, consistency, production automation and cost, Korean and Japanese products are 2 years behind.
Overall, compared with its Korean/Japanese counterparts, China Electric Vehicle Battery companies are not competitive in the international market.
Electric vehicle companies are making significant investments in their business: the Chinese government has made great efforts to launch and expand the electric vehicle industry.
Subsidies for electric vehicles are provided by central and local governments, although they may soon be revised.
The central government spent 28 yuan.
According to the State Council, green car subsidies were 4bn from 2013 to 2015, during which local governments spent 20bn.
China 45-
Innovation is highly emphasized in the annual plan, but the slowdown in China's economic growth has led to weaker efforts.
Both LG Chem and Samsung SDI have set up factories in China to produce NCM-based batteries.
It is believed that the South Korean government has decided that Korean companies may threaten Chinese companies by supplying batteries at half the price of Chinese products.
It is suspected that the Chinese government may be interested in excluding major battery manufacturers in South Korea and Japan, giving Chinese companies more time to catch up with their advanced rivals.
China's battery makers are still using outdated LFP chemistry, lagging behind in the new NCM chemistry and now have no threat to Korean and Japanese battery manufacturers.
But efforts to create more advanced technology batteries will soon make them better than non-batteries
China's competitors are based on how the Chinese dominate the highTechnology industry.
They did that in solar, and now they make technology-enhanced, efficient solar panels that dominate the industry as a whole.
In addition, China's efforts to lock
In the supply of raw materials, that is, cobalt and lithium, it will also affect the non-
Future Chinese battery manufacturers.
They do so in the rare earth industry, limiting opportunities in the non-rare earth industry
Rare earth manufacturers in China compete because their products are limited and the Chinese have raised their prices.
Over the next few years, I expect Chinese manufacturers to provide better electric vehicle batteries than their competitors, while their strategy with the Chinese government will hinder the development of non-electric vehicles.
Electric vehicle battery manufacturers in China
TSLA then needs to make some significant decisions about models outside of Model 3.
Disclosure: I/we have no positions in any of the stocks mentioned and no plans to start any positions in the next 72 hours.
This article was written by myself and expressed my views.
I received no compensation (
In addition to Seeking Alpha).
I have no business relationship with any stock company mentioned in this article.
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