Al There was a really insightful analyst report on China LiBattery dynamics. Here are some of the key points:
1. China Li Batteryprice in 2018 did not drop due to the overwhelming demand from auto makers, pricewill not drop much in 2019 either.
2. CATL is too big and margin too high (35% Gross Profit), it has suchpricing power over auto makers that is very unhealthy for the overall EV marketdevelopment. The article expected this to change in 2020 when huge new capacitycomes on. The predication is Gross Profit shall be around 15%.
3.Telsa battery unit cost (0.8RMB/Kwh) is 30% cheaper than the Chinese(1.1-1.2RMB/Kwh), so there are quite a bit of catch up to do.
4. European EV makers will build Li Battery plant to alleviatedependence on 3rd parties, because battery is vital to its car qualityand supply stability.Another one has any ideas as how long does it take tobuild a Li Battery plant in Europe?
5. Once, there is over capacity, Li battery companies will ventureinto more energy storage business to diversify their portfolio risk. So myunderstanding is that energy storage sector will not boom for another 5 years.
