[[TitleIndustry]]

Do car manufacturers want to produce batteries themselves?

Date:Nov 15, 2019

Recently, Volkswagen said that it has opened a power battery test production line at the Center of Excellence in Salzgitter, Germany. About 300 experts participated in the development, which is regarded as another one for Volkswagen to enter the electric vehicle market. milestone. In the future, Volkswagen will establish a complete battery manufacturing plant here with the Swedish startup NorthVolt.


Pros and cons of car manufacturers producing batteries

For car manufacturers, the benefits of producing batteries themselves are very high. First of all, there is no need to worry about the supply problem. Since the battery is one of the most important parts of a pure electric vehicle, most of the batteries are now controlled by upstream suppliers with limited capacity. You don't have to worry about capacity constraints if you produce your own battery. Secondly, car manufacturers can arbitrarily change the shape of the battery according to the shape of their own cars. The use of the car design, including the interior, the space will be more reasonable, and will be quickly introduced to the market at the first time, without having to talk to the battery supplier. Third, the most important and most expensive component of pure electric vehicles is the battery. The production of batteries can also fully grasp the profits in their own hands. Fourth, by producing batteries yourself, we can provide consumers with better battery repair and replacement services in the future.


However, there are some disadvantages in producing batteries yourself. The first is to bear huge R&D costs, and if mass production is not possible, the unit price will be high, but not cost-effective. Second, automakers are still relatively amateurs in battery research and development, such as Panasonic, Samsung, and LG in the battery market for many years. These manufacturers' batteries are not only supplied to cars but also to other household equipment, so they are highly resistant to risks. And car manufacturers have to take on even greater risks.


Pros and cons of battery suppliers producing batteries

At present, the batteries of most electric vehicles on the market are from suppliers, such as Ningde era, Panasonic, LG, Samsung and so on. The batteries produced by these battery suppliers. There are also great advantages: First, these companies have developed batteries for many years and have certain technical experience, which is much better than the development of automobile manufacturers from 0. Secondly, through mass production, the batteries of these companies have also reduced production costs, which is also a good thing for auto companies.


Battery manufacturers also have some shortcomings. For example, some batteries are designed by car manufacturers, and battery suppliers are responsible for production, which will leave a safety hazard. Not long ago, the Weilai ES8 recalled because the Ningde era was only responsible for production, and the battery design was provided by Wei, so neither of them found any safety hazards. Caused the vehicle to spontaneously ignite. The batteries developed by battery suppliers themselves are often modular in fixed form. This forced the car manufacturers to change the design to adapt to the battery, which is what manufacturers do not want to see.


The technology is good to chase, the key is cost control

In fact, the technology of ternary lithium batteries is already very mature, and all major auto manufacturers are using them. If manufacturers like Volkswagen and Toyota develop batteries, they will hire professional technical personnel with high salaries, plus the strong capital of these manufacturers. Strength, it can be commercialized in two or three years, it is not difficult to catch up, but the real difficulty is to control costs.


At present, the Ningde era has cooperated with 10 domestic automakers to supply batteries and reduce production costs through mass production. And if it is a small car company, and its own car production is not high, then it is very uneconomical to develop batteries.


It is understood that Volkswagen plans to produce nearly 70 new electric models in the next decade, and their total sales will reach 22 million. Therefore, the huge load is the main reason why Volkswagen has to actively develop and produce batteries.


To sum up:

At present, the only market in China that can produce pure electric vehicle batteries is BYD. And BYD has indeed tasted the sweetness, the cost of pure electric vehicles can be controlled to be relatively low, and the prices of other manufacturers' models are often not competitive with BYD. And Tesla also announced that he would produce his own battery. Among the independent brands, Geely has already cooperated with LG in depth and involved in the battery field. Therefore, from the trend point of view, all the powerful car companies, sooner or later, are involved in battery production. For more car manufacturers, as well as new car companies, they have to cooperate with battery suppliers.


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