BAK Power: Taking Active Measures in Response to the Subsidy Decrease, NMC Products Are Still the Main Trend

Shanghai, April 17th - Today, the 18th Shanghai International Automobile Industry Exhibition (hereinafter referred to as “Auto Shanghai 2019”) was grandly opened at the Shanghai National Exhibition and Convention Center. Shenzhen BAK Power Battery Co., Ltd. (hereinafter referred to as “BAK Power”), as a leading domestic lithium battery manufacturer, unveiled at the conference with their 18650 high-energy cylindrical cells, 27100 cells, prismatic batteries, battery modules and battery packs and many other power battery products, to fully display their advanced result of the high-nickel 811 material system. Meantime, Ms. Li Fengmei, vice president of BAK Power, conducted in-depth communication with the media in the interview by sharing BAK’s understanding and strategy in terms of the stress and challenges faced by the power battery industry during the reshuffle period.

Photo: The booth of BAK Power

With the entry of overseas-funded enterprises, the subsidy policy for new energy has been continuously adjusted. As a crucial upstream industry of the new energy automobile industry chain, the stress of the power battery industry has risen sharply. However, the lithium battery industry did not present a negative trend under such a severe circumstance. According to statistics from the Research Department of the Power Battery Application Branch, the installed capacity of power batteries for new energy vehicles in China in March 2019 was about 5.09GWh, marking a rise of 146.3% from the same period last year and 126.69% from February 2019. Among them, NMC material batteries once again proved its mainstream status, with an installed capacity of 3.89GWh, accounting for 76.47% of the new energy vehicle market share, achieving an increase of six percentage points compared with the same period of last year, which outshined all other battery products. In the meanwhile, Tesla's presence has further enhanced the attention and confidence for NMC cylindrical batteries' development inside and outside the industry.

Data Source: Research Department of the Power Battery Application Branch

Most lithium-ion battery companies showed their full confidence in the face of the inevitable trend of subsidy decrease. Li Fengmei also expressed her idea during the interview at the exhibition: " In the long run, the reduction of subsidies will not only help promote the technical level of power battery products, but also achieve the goal of limiting the low-end, encouraging the high-end, motivating the excellence to a better state, and thus improving the industry norms. At the same time, with the flow of overseas-funded enterprises into the Chinese market, the industry competition is intensifying, which helps the industry to eliminate low-end production capacity, thereby promoting the industry to be reshuffled and leading to better development of the industry. It is a spur to the battery industry as well as a good thing for BAK Power."

The newly released subsidy policy in 2019 shows that the next step in the development of the industry is no longer to pursue the improvement of the energy density of the power battery, but also to take into account the safety, cycle life and mileage requirements of the power battery. Li Fengmei said: "The pain during the transitional period is the only way to promote the high-quality development of the industry. The introduction of the new subsidy policy puts higher demands on lithium-ion battery enterprises. The improvement of quality is the only solution. For BAK Power, we will work on further improving the battery quality, enhancing the engineering process, and promoting the upgrade of the self-inspection system for battery cells. BAK Power will respond to the industry development stress brought by the new subsidy policy with higher quality products and accelerated upgrade of technology, to benefit the consumers ultimately."

Product quality is the foundation of the development of the lithium-ion battery industry. The tremendous pressure will be converted to motivation and then lead to innovation. When the focus returns to product quality, Chinese lithium-ion battery industry will surely usher in breakthroughs and developments after overcoming the transition period.