No one dares to guarantee who will dominate the future of CR1620 battery technology

To promote coordinated development and realize battery-led innovation, Zhang Yongwei, Secretary-General and Chief Expert of my country's Electric Vehicle Hundred People's Association, summarized the following ten aspects:

First, repositioning the battery industry.

We found a conclusion that the battery industry should be at the forefront of innovation in the entire electric vehicle industry and should play the role of a "locomotive". The development of electric vehicles is indeed a systematic project. The innovation of this system includes many aspects such as the forward research and development of the whole vehicle, "three electrics", lightweight, and intelligence, but the most basic and important thing should be the breakthrough in battery technology. Batteries should be a key to solving many problems of electric vehicles, especially mileage anxiety, high costs, and performance improvement. In the past, batteries did play an important role in the layout of the entire electric vehicle, but now it seems that they need to increase their investment, especially the lithium-powered lithium-ion battery route, which really requires both accelerated innovation and a strong sense of urgency. The pure electric technology route based on lithium-ion batteries and ternary batteries should accelerate innovation and find areas where they can exert their core competitiveness in the competition of technology routes, otherwise they will face the risk of being replaced. However, battery innovation is now facing many problems. The chairman just mentioned that the entire battery ecosystem is still unbalanced and uncoordinated. There is an incoordination between materials and batteries, and between batteries and vehicles. There is also an incoordination between the entire battery manufacturing and environmental protection industry chain. Therefore, the battery industry is ahead. To solve the current imbalance and incoordination problems, it is necessary to reposition the battery.

Second, we must attach great importance to upstream resource issues from a strategic perspective.

In the early stages of development, we rarely discussed resources and always believed that resources were endless. When resources become a bottleneck, we feel that strategic resource planning should be put on the agenda as soon as possible. This is the shortcoming of the industry chain in the past planning. Now the world, as you saw yesterday, India also proposed to use the power of the country to acquire and control key lithium and cobalt resources around the world. Now we lack a large layout. Our country is relatively rich in lithium resources, but poor in cobalt resources. my country only accounts for more than 1% of the global cobalt reserves. Therefore, as electric vehicles gradually break through from the level of 100,000 to the level of one million, and will reach the level of tens of millions by 2030, this bottleneck should be very prominent. Therefore, our second suggestion is to strategically plan the upstream resource problem as early as possible. Now the price of resources has become a prominent aspect of the entire disharmony. That is to say, the bottleneck of upstream resource development technology has led to our low self-production rate, so the supply of resources has tightened, so the price has soared, and the soaring price has led to a sharp increase in the cost pressure of the entire industrial chain. Therefore, the space for price increases is passed on to batteries, vehicles, and then to the consumer end in turn, so this price has become the most important aspect of reducing costs in the electric vehicle industry. Supply-side reform, the supply side of our electric vehicle industry, reducing the cost of upstream resources should be our most important aspect, so that electric vehicles can enter the market faster.

Third, my country's competitive performance is better.

The chairman just mentioned that we occupy half of the world's ten companies. In terms of output, production, shipments, and especially competitiveness, we have a rare opportunity to lead. Among so many emerging industries, we are more satisfied with electric vehicles, which can be praised in the world. When it comes to electric vehicles, in the entire automotive industry chain, the most impressive thing is actually the battery, and there are still many shortcomings in other aspects. Our output is very large, and there is also the problem of investment virtualization. The so-called investment virtualization means that a large amount of investment is accumulated around some solidified technologies and some low-end fields, which is easy to produce some output without actual competitiveness. These outputs may eventually become obstacles to industrial innovation. Therefore, large output is not necessarily the biggest advantage, but without output, it is difficult to cross the threshold of building competition, so this is a double-edged sword.

Fourth, the industry competition situation is mainly unfolding in the Asia-Pacific region, my country, Japan and South Korea.

Just now, the chairman also mentioned that many Korean companies attended the meeting today, including SK, LG, Samsung, Korean, Japanese and Chinese battery companies. They all have their own strengths, but we should really feel that in the competition for the next generation of batteries, in this round of competition, we have increased production and used our management practices to enable domestic companies to grow rapidly, but there is indeed great uncertainty as to who will be the winner in the competition for the next generation of batteries. We vaguely feel that if Chinese companies do not speed up the layout of the next generation of battery technology, the competition landscape will be rewritten, so the pressure of competition is still huge. Indeed, there are good and bad companies in our industry, and there are many relatively extensive practices that affect the reputation of the industry. In fact, the battery industry does not have a very good reputation. Companies that do well are considered worthy of praise, but many companies in these fields are indeed trapped in an extensive and blind development path of enclosure, money and concept, which ultimately not only fails to achieve success, but also affects the reputation of the industry. Therefore, we must encourage truly competitive companies to take on the heavy responsibility of industry development, so that we can truly make this industry bigger and stronger in future competition. This is an aspect that the battery industry really needs to pay close attention to.

Fifth, from the perspective of the company's development strategy, expanding into more fields and binding strategic resources have become important measures for battery companies.

Expanding fields does not mean expanding into real estate, but expanding into key upstream cross-cutting fields. Blind diversification is also a concern in the battery industry. Once a company feels that it has become an influential brand in the industry, it is indeed critical to maintain strategic positioning. We are very worried that the company will not be able to maintain its own strategy. Excessive consumption of this market brand obtained through competition is also an issue that must be grasped. We must seize opportunities, but prevent ourselves from falling into the trap of blind expansion. In addition, binding strategic resources, especially through internationalization to achieve the layout of upstream resources, is an important area that my country's battery companies are currently exploring, so that battery companies can assume the responsibility of national strategic resource planning. Of course, how battery companies layout the industrial chain, the most concerned thing at present is the relationship between batteries and complete vehicles. Through in-depth cooperation between the two, problems that could not be solved in the past can indeed be solved. In the past, batteries did not understand complete vehicles, so the batteries handed over to complete vehicles had to be further developed and reused. Complete vehicles did not understand batteries, and there were some issues that we said we would study again on how batteries can achieve synergy with complete vehicles. Through the deep integration of the two, we can solve the problem of the "two skins" of the past dual-track operation, but we must also consider how to achieve a better "whole-part relationship". We cannot lose independent and globally competitive professional battery companies in the market when we are overly pursuing industrial expansion. In a few years, such companies will be gone and transformed into companies in other fields. This may not be the best result for the industry. That is, my country really needs several independent and professional battery companies with global competitiveness.

Sixth, batteries drive the rapid development of equipment, recycling, commercial operations and other businesses.

Batteries have risen, and their driving force is extremely strong. They not only drive the development of our cars, but more importantly, they drive equipment. Now the key to making a good battery is to have good equipment. The key to making a good equipment is that the company can understand the equipment better. Therefore, companies that really make good batteries are often companies that have more say in equipment. Therefore, batteries drive the development of the equipment industry, the development of the manufacturing industry, and the development of intelligence. We found that the intelligent level of battery companies that do well is also the best, and intelligent manufacturing, unmanned workshops, and product control are also first-class. Now the level of intelligence of battery companies has run ahead of vehicle manufacturers. This is the driving force of battery companies. In addition, it also drives the innovation of new business models. Our research also found that it is very likely that in the next few years, there will be national or even overseas battery operating companies. There will be both battery manufacturers and professional battery operating companies. These operating companies integrate operation and recycling, and can also introduce financial attributes, which will realize a good business model, that is, it operates batteries, recycles batteries, and uses batteries in cascades, so that batteries can be digitized and asset-securitized, so it may be feasible in terms of profit model. The battery itself is also being service-oriented, and the manufacturing industry is being service-oriented.

Seventh, who will dominate the future technology.

We found that there is indeed very severe competition in technology, and no one dares to guarantee who will dominate the future technology. You can see that the cost of our power lithium-ion batteries and the cost of the battery cell have reached 50 cents or 60 cents per watt-hour. Low cost has been achieved through technological progress, and it has strong competitiveness. The chairman just talked about what the next generation of batteries will be? There is indeed a lot of competitive uncertainty. Therefore, we say that battery technology should play a unique role among many technical routes, but which battery technology can dominate our industry in the future must be observed in innovation, and we cannot stay at the current level. Potential alternative technologies, or even disruptive technologies, still exist, so there will be "black swans" in this field.

Eighth, the key lies in R&D and technological innovation.

Our research found that the industry ultimately depends on innovation and R&D, especially source innovation. However, in our field, we think the biggest problem is not just the problem of insufficient investment by companies. my country has the fastest technological and application innovation in the battery field, but source innovation and basic innovation are lacking. One of the important reasons why source innovation and basic innovation have not been solved for a long time is that our R&D organization method may need to be updated and improved. Those who do basic research often don't care much about market demand. The chain of production, learning and research cannot be opened up. Some scientific and technological platforms that undertake national basic research have gone too far backwards and engaged too much in product-level research and development. They have not assumed the responsibility of public technology basic research entrusted by the state. As a result, our investment and organization in the source and basic fields are not in place, which also determines the possibility of weak innovation in this industry in the future. It is a hidden worry.

Ninth, promote the coordinated development of the industry.

It is recommended that the industry should have a good ecology and achieve coordinated development. Technology coordination, industry coordination, market coordination, and interest coordination should also be coordinated. There should not be too much distortion of interests. That is, long-term losses in a certain link may not be good for the industry. Therefore, both industrial coordination and market coordination and interest coordination should be achieved.

Tenth, in order to construct a good industrial ecology, a good policy and regulatory environment should be established.

Batteries are an industry with full competition and externalities. The government needs more efficient and scientific management. However, the government should take into account the laws of innovation in this industry in its management and leave sufficient expectations and policy adjustment time for companies to improve their technology. The research and development cycle and replacement cycle are at least two years or even longer. Too fast policy adjustments without much expected policy adjustments may make the company prone to passiveness. Second, in supervision, more emphasis should be placed on external supervision, such as safety and environmental protection, and on post-event supervision, reducing some relatively simple administrative management. Some of the administrative methods we used in the early stage may need to be transformed more towards post-event external supervision, so as to create a good industrial development environment for our company.

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