The most direct impact of the convergence of global industrial development trend is that the competition in the supply chain is no longer based on countries, but has become a competition within the scope of globalization. What determines the competitive pattern of a leading enterprise will no longer be the actions of competitors in the domestic market, but perhaps more influential competitors and actions come from outside the country.
The industry chain competition pattern of electric vehicle market is gradually showing such a trend, which is now the most typical in the supply chain of electric vehicle battery industry. For example, in addition to the competitors in the Chinese market, LG Group, a Korean enterprise, poses an important competitive threat to Contemporary Amperex Technology Co.Limited(300750) , a global electric vehicle battery head enterprise.
LG Group has earlier spun off its battery business and planned a separate IPO in this field. The company after the spin off is temporarily called LG new energy in the industry. After the IPO, LG new energy will have more capital to invest to challenge Contemporary Amperex Technology Co.Limited(300750) 's position as the global overlord of electric vehicle batteries. In 2020, LG once briefly ascended this global throne, But then it was surpassed by Contemporary Amperex Technology Co.Limited(300750) .
The investment manager of an American investment institution and a Japanese investment institution told the China Business Daily that the IPO of LG new energy is very close, and the relevant work is in full swing at present. Their institutions are interested in participating in the IPO fund-raising of LG new energy. They also revealed that the fund-raising scale of LG new energy is about 12.75 trillion won, about US $10.8 billion, and they are very optimistic about the value of LG new energy.
In fact, it was only in December 2020 that LG new energy was separated from LG Group. An analyst of a Chinese securities firm told reporters that he believes that LG new energy is separated from the chemical business sector of LG Group, and the obvious purpose is to compete with China's Contemporary Amperex Technology Co.Limited(300750) . "Because the development trend of electric vehicle industry has been determined, the battery has become a key link in the supply chain. Who has mastered the production capacity of electric vehicle battery with high yield and excellent technology will not be a big problem in the market for a long time. After a separate IPO, LG new energy will have more funds to expand production, so as to grab market share." He said.
Due to the industrial foundation of LG, a large Korean enterprise group, in the field of electric vehicle batteries, the market research institutions in South Korea are very mature in the detection and research of the global electric vehicle battery market. Among them, sneresearch is a professional energy research institution. According to the research data of this institution, in October 2021, Contemporary Amperex Technology Co.Limited(300750) accounted for 34% of the global electric vehicle market share, ranking first, while LG's market share was 15.6%, ranking second.
"The electric vehicles of many automobile manufacturers in the United States have stable purchase contracts with LG's battery business." The investment managers of the aforementioned U.S. investment institutions explained to reporters that they are optimistic about the investment value of LG new energy, which is the most intuitive and easy to explain reason. "The global market is very large, and automobile manufacturers are willing to see a competitor with the same strength." The investment manager has a consistent and distinctive American competitive thinking.
A senior person from a Chinese battery enterprise told reporters that LG has a good R & D foundation in the battery field, a sound patent system, and the ability to quickly transform these R & D and technologies into large-scale production. "The problem it always has is how to form profits. From the financial report, the profit performance of LG battery business in 2019 and 2020 is very poor. In the first nine months of this year, the profit margin reached 5%, which is the problem to be solved by LG." He said.
He told reporters that at present, there are mainly two kinds of product routes in the field of electric vehicle batteries, one is the lithium iron phosphate battery route, and the other is the ternary battery route. From the perspective of advanced technology, the latter is better than the former, but the threshold of the former is relatively low, the capacity and technology adaptation are relatively mature, and the market application scale is large. "LG initially had rich technical reserves and product transformation on the ternary battery route. Now, LG also began to make lithium iron phosphate batteries, but this is still in its infancy." He told reporters.
This is quite different from the global overlord Contemporary Amperex Technology Co.Limited(300750) . Contemporary Amperex Technology Co.Limited(300750) started with lithium iron phosphate battery, but later vigorously laid out the R & D and production of ternary battery. At present, both batteries are produced. Even ternary battery, Contemporary Amperex Technology Co.Limited(300750) also has a relatively mature patent layout and relatively mature capacity adaptation, which is the advantage of Contemporary Amperex Technology Co.Limited(300750) .
"We believe that after the IPO, LG will have more space and capacity to adapt to its battery capacity structure, so as to expand its market share." The investment manager of the aforementioned American investment institution told reporters. Different from the way people in the industrial chain are used to studying products and technical routes, investors seem to pay more attention to the almost explosive growth market demand in the field of electric vehicle batteries in the past two years, and are willing to accept investment opportunities.
However, this is obviously a global industrial chain competition, and the attack and defense often translocate. Just as LG new energy IPO and began to cut into the production of lithium iron phosphate battery, which was not involved in a large area before it, Contemporary Amperex Technology Co.Limited(300750) also released the pressure of competition to South Korea. The aforementioned Chinese Securities analyst told reporters that in October 2021, Contemporary Amperex Technology Co.Limited(300750) authorized Hyundai Mosby of Korea to use its module free technology. "This technology is to form a typical battery pack, which will be lower in cost and higher in energy density." He explained to reporters.
South Korea Hyundai Mosby is an auto parts enterprise under the South Korean auto giant Hyundai Group. The analyst vividly compared the cooperation of Contemporary Amperex Technology Co.Limited(300750) to: "burning the war of competition into LG's backyard, much like the vertical and horizontal cooperation in the spring and autumn and Warring States periods." However, he also said that after the completion of IPO fund-raising, "LG will certainly fight back on a large scale".
Senior people from the aforementioned battery enterprises told reporters that there was a factor that could not be ignored in the development process of China's market in this field, that is, the initial subsidy was an important standard for obtaining subsidies. At that time, the energy density of the battery was higher. From the technical characteristics, the energy density of the ternary battery was higher and more in line with the orientation of subsidies. Therefore, the ternary battery technology benefited more at that time, However, since then, the subsidy has declined, the threshold of lithium iron phosphate battery is relatively low, and it is also better in the adaptation of capacity and technology. Therefore, lithium iron phosphate battery has a great growth.
In this competition between LG and Contemporary Amperex Technology Co.Limited(300750) , another factor that can not be ignored is the attitude of automobile host manufacturers. "Carmakers are used to their high position. They are not willing to face a tougher supplier than themselves. Therefore, they are willing to support a competitor. They think it is beneficial to their own interests." The investment manager of the aforementioned American investment institution told reporters about his value judgment logic.
LG has clearly understood this mentality, so it also has a huge and radical production expansion plan. Before splitting the battery business, LG plans to invest 10 trillion won (about 60.2 billion yuan) in the battery business by 2023. From the perspective of the investment managers of the above-mentioned American investment institutions, automobile host manufacturers are willing to see such a competitive situation.
(China business daily)
