Date: Mar 8, 2019
When subsidies vanish, what happens?
In 2018, the Chinese market saw a decrease of 2.76% in new vehicle sales volumes. Many market segments recognized similar rates of decline. Under the general recession, the Chinese NEV (New Energy Vehicle) market is the only one to emerge and rise out of the situation to achieve a 61.74% growth. The total sales volume reached 1,256,200. There is no doubt that the demand for batteries will increase as the NEV market continues to expand. However, not all battery companies are capable of achieving the rapid growth. As the subsidies decrease, the NEV market has to switch from being policy orientated to being market focused, while OEMs must work with battery companies to launch products that have long cycle life, low cost, and high safety. Therefore, the cost pressure to both OEMs and to battery suppliers will gradually increase. Meanwhile, companies that have strong technical capabilities and clear marketing strategies will be able to capture the opportunities.
As one of the main battery suppliers, Wanxiang A123 can provide over 35 million batteries that can satisfy customers’ 7GWh battery capacity requirement. Compared to 2017, this capacity is a significant increase. For the challenges that 2019 will bring, Peter W. Cirino, the General Manager of Wanxiang A123, has every confidence. Wanxiang A123 will continue to develop the cost structure, improve efficiency, increase input in research and development, and accelerate innovation in order to provide high-capacity, cost-competitive, and technically advanced products for our customers. Based on these factors, Wanxiang A123 expects to achieve more than 50% growth in 2019.
Hard Core Technology and a Full Product Portfolio Lay a Solid Competitive Foundation
Market demand presents the opportunity to diversity as the NEV market expands. Therefore, diversifying technologies has become a company’s best option. Wanxiang A123 has developed a full portfolio of products with varying applications. The products cover high voltage passenger vehicles, low voltage passenger vehicles, and the commercial vehicle market. Wanxiang A123 focuses on the developments of cells, modules and systems, and plays an important role in 12V starter batteries, 48V mild-hybrid lithium-ion batteries, and high capacity NMC batteries.
In recent years, the international emission standards have gotten harsher, while the Chinese government has launched the NEV & CAFC credit policies. New energy subsidies are gradually decreasing and will be eventually cancelled. Finding the best solution must take into account the policies, energy efficiency, and cost, and thus the 48V mild-hybrid solution is gradually becoming the choice of many companies to research and develop.
In fact, Wanxiang A123 began to concentrate on the development of 48V products from as early as 2013 and had a gross investment of $224 million in the development of 48V Mild-Hybrid Battery System. The system adopts the proprietary technology of UltraPhosphate™ and allows the power density of the battery cells to reach 5900W/kg resulting in a systems level power density that exceeds 2000W/kg. The 48V system has long cycle life and high safety. The project team has developed a natural cooling design and produces the battery in a smaller size to make it easier for vehicle integration. Wanxiang A123’s 48V products lead the industry with large scale production both inside and even outside of China. It successfully integrates into cars of 13 mainstream OEMs all over the world, the global market share of which ranks number one. Benefitting from years of technical advancements and leading the industry in LFP technology, Wanxiang A123’s 48V battery system was successfully implemented into Geely’s newly launched NEV, the Borui GE MHEV, and allows the vehicle to achieve 15% fuel savings. This helps Geely successfully step into the mild-hybrid vehicle market.In 2018, Wanxiang A123’s 48V battery was honored with the “Automotive News 2018 PACE Award” which honors superior innovation and technological advancement in America. Wanxiang A123 owns the most diverse 48V battery portfolio, two of which has been applied in P0 Architecture. Furthermore, it is known that the company has developed its second generation product, which has higher power and more capacity. The product’s ultra-high performance makes it easy to integrate other functions of the electrical system into the 48V system so much so that it has received orders from international luxury car brands.
