Subsidies have declined, forcing power batteries to reduce costs, while rising raw material prices have further squeezed the profit margins of the industrial chain. Since the beginning of this year, there has been a sharp increase in operational pressure in multiple links of the new energy vehicle industry chain. According to the data from the third quarter report, it is not uncommon for companies in sub sectors such as battery materials, electrolytes, and separators related to power batteries to experience a significant slowdown in performance growth, a decline in gross profit margin, and a negative growth rate in net profit. On the other hand, benefiting from the rise in raw material prices, upstream raw material manufacturers and positive electrode material manufacturers' stock prices and performance "flew together", and multiple companies' profits increased by over 100%.

　　Analysts point out that under the dual pressure of refunds and subsidies and the rise in upstream raw material prices, car companies will shift the pressure of cost reduction to the power battery sector. Since the beginning of this year, the price of power batteries has decreased by 20% -30%, and has taken the lead in transmitting pressure to sectors with high gross profit margins, overcapacity, and weak bargaining power.

　　Professionals say that power batteries are the most important component of new energy vehicles, accounting for 40% -50% of the total cost. Therefore, changes in sales of new energy vehicles have a significant impact on battery companies. From the sales of new energy vehicles and the types of supporting batteries in the promotion catalog, the proportion of passenger car sales has gradually increased, and the proportion of ternary batteries used in supporting passenger cars and special vehicles has increased. In 2017, the total proportion of the first nine batches of catalogs reached 74% and 66%. With the growth of sales of new energy vehicles and the increasing demand for ternary batteries by vehicle companies, the institution predicts that the price of power batteries is expected to slightly rebound in the fourth quarter, and it can still pay attention to the future performance of battery companies in the middle reaches of the new energy vehicle industry chain.

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