Rising battery cell prices affect the energy storage market, what should we  do?

　　GGII  data shows that in 2021, China's energy storage battery shipments will   increase by more than 270% year-on-year. The data is very encouraging  because it  is being done at a time when the world is still suffering  from a global economic  slowdown.

　　But  this has also brought another consequence. Since September last year,   the prices of upstream raw materials have been "singing forward", and  there are  still acts of malicious roasting and hoarding in the market.  But even under such  cost pressure, material suppliers are still in  short supply. Since the beginning  of this year, lithium carbonate has  increased by about 78.57%, nickel has  increased by about 45.16%; cobalt  has increased by 16.32%. To put it directly,  the high price of  finished products has not made lithium-ion battery  manufacturers more  profitable, and it is the mines and transporters who are  making  substantial profits.

　　With SES Power's years of experience in  customizing lithium-ion battery  systems, the lithium-ion energy storage  system is mainly composed of battery  packs, energy storage converters  (PCS), battery management systems (BMS), energy  management systems  (EMS) and other electrical equipment. Among them, the cost of  battery  pack accounts for nearly 60%, PCS accounts for 10-20%, and other costs   account for about 20-30%.

　　Energy storage companies generally  believe that such increases will not  last long, but this situation does  have a greater impact on the industry and  increases risks. The impact  of this price increase on different companies is  also different.  Everyone's attitude towards this market is very firm. The most   important thing at this stage is to eliminate the expectation of price  increases  at the source even under the circumstances of a lot of  realistic pressure.

　　In our opinion, most companies will make a  relatively conservative decision  at present. Enterprises with  relatively strong strength may digest the price  increase of battery  cells when the project is confirmed. However, companies with  relatively  weak capital chains cannot withstand the price pressure and can only   follow the price increase.

　　In this "price war", stabilizing the  market is like stabilizing the  military's heart. Leading enterprises  and leading brands act as the true leader  of an industry when they can  accommodate themselves, which is one of the most  important ways to  stabilize the market.

　　It is worth noting that under the current  situation of global energy  tension, the price increase of lithium  batteries does not really affect the  demand, and the global market is  generally more accepting of price  increases.

　　The surge in  lithium battery raw materials has put SES Power under  tremendous  pressure. We use 12V100Ah, 12V200Ah, 24V100Ah, 24V200Ah, 36V100Ah,   48V50Ah, 48V100Ah, etc. 12V50Ah, 12V60Ah car starting batteries (the  maximum  peak current can reach 1500A), almost need to be costed once a  week. In response  to the upstream price increase, we upgrade our  products on the one hand, and  strive to guide the market with quality.  On the other hand, look for better  suppliers and products, or use  qualified echelon batteries while ensuring safety  and quality. We  believe that with the gradual release of upstream production  capacity,  material prices will enter a downward cycle from the second half of  the  year to 2023.

　　This round of price increases has a greater  impact on large projects with  long project cycles. However, most  practitioners face the market rationally and  calmly, and actively  respond to them, gradually forcing enterprises to deploy  and think  about multi-technology routes. For example, some companies have   accelerated the research and development of sodium ions.

　　SES  Power believes that the industrial system must maintain a reasonable   gross profit margin, pay attention to the management system of the  entire life  cycle of the energy storage system, and follow the inherent  laws of the  industrial economic system to ensure the healthy  development of the market. As  the core cost component of the  lithium-ion energy storage system project, the  substantial price  increase directly affects the project income. For these  projects, the  result is nothing more than requiring developers, integrators and   battery manufacturers to make profits in varying degrees to ensure the  normal  implementation of the project.