Power Battery "Battle for Supremacy": Can CATL hold on to its throne in the face of LG's attack

　　LG and CATL are both leaders in the lithium battery industry, and SES Power has a long history of cooperation with them and has been paying considerable attention to their development, as they have the world's top ternary lithium batteries, lithium iron phosphate batteries, and even sodium ion batteries and solid-state lithium batteries.

　　According to data released by SNE Research, a South Korean market research firm, CATL maintained its dominant position in the electric vehicle battery market from January to November 2021. CATL held the No. 1 position with a market share of 31.8%, 10% points higher than second-place LG New Energy Solutions.

　　SNE Research noted that Chinese companies led the growth of the electric vehicle battery market (including pure electric vehicles, plug-in hybrids and hybrids) from January to November 2021. Compared to the same period 2020, CATL and BYD grew by 180% and 192%, respectively.

　　A: CATL

　　When we talk about power batteries, we can definitely think of CATL. CATL New Energy was established in 2011, which is born from ATL, the leading battery manufacturer in the global consumer electronics neighborhood, and the personnel technology is the same. Its main field of involvement is the research and development, production and sales of new energy power batteries, and lithium batteries have been its research direction, and in recent years, there are also involved in the research of sodium ion batteries and so on.

　　In 2015, CATL carried out global layout through WIPO; in 2017, the use of power battery systems developed and produced by the company climbed to the first in the world and has been maintained since; in June 2018, the company successfully landed on the A-share Growth Enterprise Board and listed on the Shenzhen Stock Exchange; in 2019, the company began to increase the progress of globalization.

　　CATL' suppliers are all leading domestic enterprises, and it cultivates its own quasi-foundry through the method of equity participation, while decentralizing suppliers to reduce costs while safeguarding production capacity. In order to improve the match between end products and vehicles, CATL has improved the performance of battery energy density, heat dissipation, shock resistance, short circuit prevention, etc. Therefore, the battery system has the largest proportion of patents. However, CATL has fewer patent applications in the direction of battery materials, and it is more difficult to restrict suppliers' offers through technical barriers.

　　B: LG New Energy

　　In 1995, LG Chem established the Battery Business Division and started lithium secondary battery R&D. In 2011, the company officially entered the power battery industry; in 2020, an independent subsidiary LG Energy Solutions was established, and the new company will accelerate the development of new-generation battery technologies such as all-solid-state batteries and lithium-sulfur batteries, with products covering power batteries, energy storage and consumer batteries. To date, it has received 180 trillion won worth of electric vehicle battery orders from global automakers.

　　In terms of market layout, LG New Energy currently has global production and operation systems and technology innovation centers in China, Korea, the U.S. and Europe. LG New Energy's partners are currently focused on mainstream vehicle brands, with 13 of the world's top 20 automotive brands as its partners.

　　In terms of technology, LG New Energy was the first company in the world to mass-produce ternary cathode materials, and was the first in the industry to mass-produce the nickel-lower cobalt quaternary lithium battery (NCMA) in 2021. It is worth mentioning that the quaternary lithium battery is considered by the industry to be a better solution to the balance of power battery in terms of range, cost, fast charging and safety, and is expected to make up for the shortage of ternary batteries in terms of cost and safety.

　　In terms of safety, LG New Energy has mastered the core key material technology such as diaphragm, developed intelligent BMS with artificial intelligence and deep learning technology, realized the transmission of big data and safety diagnosis algorithm results through OTA, and optimized the safety and accurate monitoring and early warning of the battery in real time. At the same time the application of the latest safety technology module and CTP highly integrated design, significantly improve the safety and reliability of the power battery.

　　For future target planning, LG New Energy plans to achieve a 260GWh capacity breakthrough by 2023; achieve $270 billion in sales by 2024 and become the number one company in the electric vehicle power battery field; commercialize lithium-sulfur batteries by the end of 2025; and commercialize all-solid-state batteries between 2025 and 2027.

　　C: CATL VS LG New Energy

　　The explosion of electric vehicles, large energy storage systems, photovoltaic energy storage and other industries has directly driven the demand for lithium batteries to blow up. According to the forecast of EV Volumes, a famous consulting company in Sweden, by 2025, the global power battery demand will exceed 1000GWh and enter the TWh era; while the data of SNE Research in South Korea shows that the installed capacity of power batteries in electric vehicles will reach 1163GWh in 2025 and 2963GWh in 2030, with a big increase in power battery demand.

　　Why would LG be said to be the biggest rival of CATL and not other companies? On the one hand, it is because of the production volume, and on the other hand, it is because of their cooperative manufacturers.

　　Lithium battery expansion is a cycle, investment in site selection, construction of production lines, capacity climbing and a series of need to layout in advance. A very important aspect of the constraint production is raw materials: the two leading companies have successively laid out a large upstream industry, hoping to open up the industrial chain, through its own resources to further ensure the release of production and enhance the right to speak.

　　But the power manufacturers are not only the production line, how much can be installed is the decisive factor. From the current manufacturers have been bound to support the new energy vehicle enterprises, LG new energy is indeed the most opportunity to catch up with the existence of CATL.

　　From the perspective of the entire power battery industry, the current global market is basically guided by Chinese, Japanese and Korean enterprises. LG New Energy and CATL are the only two companies that are half of the world, and the double oligarchy pattern is gradually forming. In this case, European and American companies want to break through, either cross-generational research and development of new technologies, or make huge investments to participate in the cost war.

　　Performance comparison: In 2018-2020, LG New Energy and CATL's lithium battery business revenue are steadily increasing, and in 2020, LG Chem's lithium battery business revenue will be $11.4 billion and total revenue will be $26.7 billion; CATL's lithium battery business revenue will be $6.4 billion and total revenue will be $7.8 billion.

　　Market share comparison: According to the installed volume data of power lithium batteries, in 2019-2021, LG New Energy's market share rose more rapidly, up nearly 12 percentage points in one and a half years, but CATL's market share fell by 2.44 percentage points.

　　Capacity comparison: In 2020, LG New Energy's lithium battery capacity is 120Gwh, CATL' lithium battery capacity is 69.1Gwh, LG New Energy's capacity is nearly 2 times that of CATL. According to LG New Energy's medium-term plan, in the future, the company's lithium battery capacity will reach 260 Gwh. According to the company's announcement, CATL has disclosed that its lithium battery capacity under construction is 77.5 Gwh, and after the completion of the capacity, the future capacity of CATL will reach at least 146.6 Gwh.

　　Overall, CATL is in a slight lead over LG Chem, but LG Chem's faster growth rate will make CATL' position challenged.

　　SES Power believes that the application market and environment of power battery products lead to extremely strict requirements for product performance and quality from end customers, and only by continuously investing in R&D for technological innovation, process and material improvement can we continue to meet the requirements of competitive market development. Although on the surface, the power battery is grabbing the market, in fact, the competition behind is technology, and the investment in research and development can be imagined.