When I first heard about the plan of producing 120 GWh (LFP 60G + NCM 60G) in 2021, I personally attempted to understand the likelihood of this number being achieved. Due to the imbalance that exists between the number of installed vehicles and the number of shipped vehicles, as well as the usage of ternary lithium batteries in areas such as smaller motors, energy storage, and the industrial sector (ships, heavy industry), I tried to make sense of this data. My starting point was the data from Q4, which allows us to evaluate the situation in 2021 based on the current state.
Part One: BEV and PHEV Data
For the use of BEVs, from several major clients such as Tesla, NIO, SAIC, and XPeng, due to the difference in battery capacity, Tesla had the highest usage in Q4 with 1.41 GWh, followed by NIO with 1.2 GWh. Quarterly data can be used to deduce the demand for 2021.
From the perspective of vehicle types, we can also see the relationship between the actual number of cars and the installation volume. The x-axis represents the number of cars, while the y-axis represents the installation volume. The straight line is 50 kWh, the area below 45 degrees represents cars with smaller battery capacity, while the area above represents cars with relatively higher battery capacity.
As for PHEVs, currently high-capacity EREVs bring more demand than PHEVs, with the ideal model accounting for 52.7% of the demand. The 102 Ah battery cell is originally designed for BEVs, and it is not very advantageous to use it in PHEVs.
The following chart provides a clearer picture of the major car companies’ demand for PHEV batteries in Q4. We can see the rhythm change of BMW and Volkswagen, with BMW reducing the volume of PHEVs in Q4 and driving the output of the iX3 to about 4K, corresponding to a battery requirement of 322 MWh. Based on the global plan of producing 100,000 BEVs in 2021, the planned output for iX3, i3 and Mini BEV may be 50,000, 30,000 and 20,000 respectively. Therefore, the demand for iX3 is expected to be 4 GWh. Volkswagen’s PHEV also gave way to the MEB platform.
### Demand for 2021
I have divided the demand into several quadrants. The first section includes Tesla and BMW, with demand-driven by the European market. The estimate is 200,000+50,000, which corresponds to 15 GWh. This is both an offensive and defensive strategy. The pricing of the models of the three traditional automakers, Volkswagen, SAIC, and Geely, is relatively consistent, but it is difficult to estimate the sales in China due to the intense competition. The estimate range is between 8-15 GWh.
The sales volume of new car manufacturers is also considerable, and the estimate range is 10-12 GWh. This estimate is based on the most optimistic Q4 and Q1 potential demands, with a dynamic discount range of 60%-80%. The A00 category, including Wuling and Ora, has an estimated demand of only 5 GWh for a full sale of 280,000. Nevertheless, there is a long tail effect, including the original A-class models, which are subject to considerable uncertainty.
I am not particularly pessimistic about 2021, but I believe that the current excessive optimism is unreasonable. The preparation of production capacity is essential, and it should be accompanied by a fierce price war. The actual demand is constrained by the scale of restrictive cities and the acceptance of customers in non-restrictive cities.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email firstname.lastname@example.org.