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PART 2 Weekly News

① CATL Responds: Signed a Mass Production and Supply Pricing Agreement with Tesla

On February 18th, Reuters reported that “Tesla is in talks to use CATL’s cobalt-free batteries in Tesla manufactured in China.” As it is known, Tesla has always used round cylindrical ternary lithium batteries, while it is understood that CATL will supply square lithium iron phosphate batteries, which are two completely different technical routes. Based on these two points, many people do not believe in the cooperation between CATL and Tesla this time.

However, two days later, people from CATL responded to journalists of China Securities News that “The company has signed a mass production and supply pricing agreement with Tesla at present, and Tesla will purchase lithium-ion power batteries from CATL, and everything is subject to the announcement.”

Quick Comment: In fact, Tesla’s plan to use CATL’s square lithium iron phosphate batteries has already been exposed in January this year. According to the supply chain messages, the supplier of CATL’s lithium iron phosphate positive electrode material is Defang Nano, and the negative electrode is Shangtai.

The reason why Tesla will use CATL’s lithium iron phosphate batteries is very clear, that is, to reduce battery costs. The original text of Reuters stated that “After using lithium iron phosphate batteries, the cost of the battery is expected to be reduced by more than 10%.”

According to the previous message from Garage 42, Tesla hopes that CATL’s target price will be reduced by 20%. At the same time, the use of CATL’s batteries can increase Tesla’s localization rate, avoiding the need to transport batteries from the United States to China, saving additional transportation costs and high tariffs.

② Geely may invest $300 million in NIOOn February 18th, media reported that Geely is considering investing $300 million in NIO, and after the investment, Geely will integrate NIO’s production capacity and take over the manufacturing on behalf of NIO.

In response to this news, NIO’s official comment was, “No comment, our market information is based on official announcements.” Geely’s Vice President Yang Xueliang said, “I don’t know about this matter, and I won’t comment on market rumors.”

Comment: At present, if Geely really invests $300 million in NIO, it will become NIO’s third-largest shareholder, accounting for about 10%. The first is of course Li Bin, who holds 14.4%, and the second is Tencent, which holds 13.3%. Of course, the most important thing is the latter half of the sentence, “Geely will take over the manufacturing on behalf of NIO.”

Currently, NIO’s ES6 and ES8 models are both manufactured by Jianghuai, and Li Bin has previously announced that the third model will also be manufactured by Jianghuai, so it is unlikely that EC6 will be given to Geely. The most likely scenario is that Geely will manufacture a new sedan for NIO. If this is the case, NIO has indeed found a strong support.

On February 20th, NIO released software updates

Starting from February 20th, NIO’s software was updated to version NIO OS 2.5.0. Owners need to upgrade based on the local epidemic situation. Principally, provinces and cities with severe epidemics will not be updated until there is a significant improvement.

This update mainly upgrades three major functions: smart interconnection, NIO Pilot for automatic driving assistance, and digital cockpit. In terms of smart interconnection, three new functions have been added, namely “Remote Steering Wheel/Seat Heating,” “In-Car Photo Sharing,” and “Battery Intelligent Preheating Switch.”

For the automatic driving assistance, “Automatic Emergency Braking” has been added, which not only applies to the automatic emergency braking (AEB) for the vehicles that travel in the same direction, but also adds identification for pedestrians and bicycles. Note that when using the full-speed adaptive cruise (ACC) and Pilot functions, only vehicles can be targeted. In addition, “overtaking assistance,” “dynamic instrument interface optimization,” and “other automatic driving assistance optimizations” have been added.

As for the digital cockpit, “charging assistant”, “smart scene recommendation,” and optimization of the “NOMI” experience have been added.Quick Review: Currently, OTA upgrades for on-sale products to improve product competitiveness are indeed a good practice. Given the large volume of content pushed each time, only a few feature highlights can be picked and shared with everyone.

This time, adding the “Intelligent Battery Preheating Switch” can reduce power consumption to a certain extent and increase battery life. This feature was also available in previous versions, but the previous working logic was that the battery pack preheating was switched on automatically when the remote air conditioning was turned on and met the system criteria. In other words, to activate battery preheating, the air conditioning must be turned on. After the update, even if the air conditioning is remotely turned on, the “Intelligent Battery Preheating Function” can be manually turned off or on.

There is also a new feature that is more in line with current trends, the “Charging Assistant”, which will intelligently filter out information such as battery swap stations or charging piles based on the vehicle’s location and remaining battery life, and support one-click navigation. Are you satisfied with this upgrade?

④ Volkswagen’s retail system will be reformed

On February 19, Volkswagen’s official website released a retail system reform plan. Volkswagen will pilot from the new generation of pure electric vehicle ID. series, and dealers will mainly be responsible for offline consulting, test drives, agreements, and delivery. Volkswagen’s official website will be responsible for online information attraction, order allocation, and option order placement.

Quick Comment: Volkswagen did not transform into a direct sales model. Under the new retail model, dealers will bear lower risks, prices will be more transparent, sales will be centralized on Volkswagen’s official website, dealers will not need to stock inventory or compete with each other. They will mainly be responsible for work similar to Tesla’s direct sales experience stores and delivery centers.

Single-store revenue is expected to decline compared to the original 4S dealer model, but corresponding operating costs will also decrease. This Volkswagen retail system reform provides a good template for the relationship between traditional car companies and dealers. It is believed that in the future, online sales and offline experience will become a major trend.

⑤ Audi e-tron electric SUV temporarily suspended production

On February 21, foreign media Manager Magazin reported: “Audi confirmed that e-tron has been out of production for four days due to insufficient parts supply.” Audi did not specify which parts were insufficient but confirmed that it was not related to Chinese suppliers affected by the epidemic.

e-tron is Audi’s first electric vehicle based on a new platform. As early as last year, Belgian media reported that due to a shortage of power batteries, the production plan of e-tron was cut back shortly after it started mass production.

Quick comment: Although Audi did not disclose which component was affected by the temporary suspension of production, the power batteries of Audi e-tron were previously supplied by LG Chemical. We have also reported that Mercedes-Benz, Hyundai, and Jaguar Land Rover have reduced or even suspended production of some electric vehicle models due to battery supply issues. Therefore, we judge that Audi’s suspension of production this time is also due to battery supply problems.

It seems that LG Chemical has signed too many contracts and is unable to deliver on time. In the electric vehicle industry today, ensuring the normal supply of power batteries is the key part of the entire vehicle manufacturing process.

Therefore, it seems that awarding contracts to battery manufacturers is far from enough to meet the demand of automobile manufacturers. Automakers need to participate more and more in the entire battery supply chain, and it is no wonder that General Motors and Tesla are seeking to establish their own battery factories.

⑥ Tesla may launch a 109 kWh battery pack

On February 20th, a hacker studied Tesla’s latest BMS firmware information and found that Tesla may launch a new battery pack with a capacity of 109 kWh. In addition, the hacker stated that there may be some other adjustments to prepare for the new battery pack of S/X/3.

Quick comment: Model S/X currently uses a 100 kWh battery pack, and the new long-range version models have a range of 628 km and 562 km respectively under EPA test conditions. The Model 3 uses a 75 kWh battery pack, and the long-range version with all-wheel drive has a range of 518 km under EPA test conditions.

For this possible 109 kWh battery pack, it is reasonable to use it in Model S/X, after all, it has been using a 100 kWh battery since 2016. However, if it is used in the Model 3, it will be quite amazing for the improvement of the cruising range.

By Changhao Lewis, edited by Song Song.