The problem of “aging” is actually everywhere. Now it’s the battery sector’s turn.
"A large number of new energy vehicle batteries will have their warranties expire in the next eight years, and it is urgent to solve the battery life problem." Recently, Li Bin, chairman and CEO of NIO, has warned many times that if this issue cannot be properly handled, the future Huge costs will be spent to solve subsequent problems.
For the power battery market, this year is a special year. In 2016, my country implemented an 8-year or 120,000-kilometer warranty policy for new energy vehicle batteries. Nowadays, the batteries of new energy vehicles purchased in the first year of the policy are approaching or reaching the end of the warranty period. Data shows that in the next eight years, a total of more than 19 million new energy vehicles will gradually enter the battery replacement cycle.
For car companies that want to do the battery business, this is a market not to be missed.
In 1995, my country's first new energy vehicle rolled off the assembly line - a pure electric bus named "Yuanwang". In the past 20 years since then, my country's new energy vehicle industry has developed slowly.
Because the noise is too small and they are mainly operating vehicles, users have not yet been able to enjoy the unified national warranty standards for the "heart" of new energy vehicles - the battery. Some provinces, cities or car companies have also formulated power battery warranty standards, most of which provide a 5-year or 100,000-kilometer warranty, but the binding force is not strong.
It was not until 2015 that my country's annual sales of new energy vehicles began to exceed the 300,000 mark, becoming a new force that cannot be ignored. In addition, the state provides "real money" policies such as new energy subsidies and exemption from purchase tax to promote the development of new energy, and car companies and society are also working together.
In 2016, the national unified power battery warranty standard policy came into being. The warranty period of 8 years or 120,000 kilometers is much longer than the 3 years or 60,000 kilometers of the engine. In response to the policy and out of consideration for expanding new energy sales, some car companies have extended the warranty period to 240,000 kilometers or even a lifetime warranty. This is equivalent to giving consumers who want to buy new energy vehicles a "reassurance".
Since then, my country's new energy market has entered a stage of double-speed growth, with sales exceeding one million vehicles for the first time in 2018. As of last year, the cumulative number of new energy vehicles with eight-year warranties reached 19.5 million, a 60-fold increase from seven years ago.
Correspondingly, from 2025 to 2032, the number of new energy vehicles with expired battery warranties will also increase year by year, from the initial 320,000 to 7.33 million. Li Bin pointed out that starting next year, users will face problems such as power battery out-of-warranty, "vehicle batteries have different lifespans" and high battery replacement costs.
This phenomenon will be more obvious in early batches of new energy vehicles. At that time, battery technology, manufacturing processes, and after-sales services were not mature enough, resulting in poor product stability. Around 2017, news of power battery fires emerged one after another. The topic of battery safety has become a hot topic in the industry and has also affected consumers' confidence in purchasing new energy vehicles.
At present, it is generally believed in the industry that the life of a battery is generally about 3-5 years, and the service life of a car usually exceeds 5 years. The battery is the most expensive component of a new energy vehicle, generally accounting for about 30% of the total vehicle cost.
NIO provides a set of cost information for after-sales replacement battery packs for some new energy vehicles. For example, the battery capacity of a pure electric model code-named "A" is 96.1kWh, and the battery replacement cost is as high as 233,000 yuan. For two extended-range models with a battery capacity of about 40kWh, the battery replacement cost is more than 80,000 yuan. Even for hybrid models with an electric capacity of no more than 30kWh, the battery replacement cost is close to 60,000 yuan.
"Some models from friendly manufacturers have run 1 million kilometers, but three batteries have been damaged," Li Bin said. The cost of replacing three batteries has exceeded the price of the car itself.
If the cost of replacing a battery is converted into 60,000 yuan, then the 19.5 million new energy vehicles whose battery warranty will expire in eight years will create a new trillion-dollar market. From upstream lithium mining companies to midstream power battery companies to midstream and downstream vehicle companies and after-sales dealers, all will benefit from this.
If companies want to get more of the pie, they have to compete to see who can develop a new battery that can better capture the "hearts" of consumers.
In the next eight years, nearly 20 million vehicle batteries will enter the replacement cycle. Battery companies and car companies all want to seize this "business".
Just like the diversified approach to new energy development, many companies have also stated that battery technology also adopts multi-line layouts such as lithium iron phosphate, ternary lithium, lithium iron manganese phosphate, semi-solid state, and all-solid state. At this stage, lithium iron phosphate and ternary lithium batteries are the mainstream, accounting for nearly 99% of the total output.
Currently, the national industry standard battery attenuation cannot exceed 20% during the warranty period, and requires that the capacity attenuation does not exceed 80% after 1,000 full charge and discharge cycles.
However, in actual use, it is difficult to meet this requirement due to the effects of low temperature and high temperature charging and discharging. Data shows that currently, most batteries have only 70% health during the warranty period. Once the battery health drops below 70%, its performance will drop significantly, the user experience will be greatly affected, and safety problems will arise.
According to Weilai, the decline in battery life is mainly related to car owners' usage habits and "car storage" methods, of which "car storage" accounts for 85%. Some practitioners pointed out that many new energy users today are accustomed to using fast charging to replenish energy, but frequent use of fast charging will accelerate battery aging and shorten battery life.
Li Bin believes that 2024 is a very important time node. "It is necessary to formulate a better battery life plan for users, the entire industry, and even the entire society."
As far as the current development of battery technology is concerned, the layout of long-life batteries is more suitable for the market. The so-called long-life battery, also known as "non-attenuation battery", is based on existing liquid batteries (mainly ternary lithium batteries and lithium carbonate batteries) with nano-process improvements in positive and negative electrode materials to delay Battery degradation. That is, the positive electrode material is added with a "lithium replenishing agent", and the negative electrode material is doped with silicon.
The industry term is "silicon doping and lithium replenishing". Some analysts said that during the charging process of new energy, especially if fast charging is frequently used, "lithium absorption" will occur, that is, lithium is lost. Lithium supplementation can extend battery life, while silicon doping can shorten battery fast charging time.
In fact, relevant companies are working hard to improve battery life. On March 14, NIO released its long-life battery strategy. At the meeting, NIO introduced that the 150kWh ultra-high energy density battery system it developed has an energy density of more than 50% while maintaining the same volume. Last year, Weilai ET7 was equipped with a 150-degree battery for actual testing, and the CLTC battery life exceeded 1,000 kilometers.
In addition, NIO has also developed a 100kWh soft-packed CTP cell heat-diffusion battery system and a 75kWh ternary iron-lithium hybrid battery system. The developed large cylindrical battery cell with an ultimate internal resistance of 1.6 milliohms has a 5C charging capability and can last up to 255km on a 5-minute charge.
NIO said that based on the large battery replacement cycle, the battery life can still maintain 80% health after 12 years, which is higher than the industry average of 70% health in 8 years. Now, NIO is teaming up with CATL to jointly develop long-life batteries, with the goal of having a health level of no less than 85% when the battery life ends in 15 years.
Prior to this, CATL announced in 2020 that it had developed a "zero attenuation battery" that can achieve zero attenuation within 1,500 cycles. According to people familiar with the matter, the battery has been used in CATL’s energy storage projects, but there is no news yet in the field of new energy passenger vehicles.
During this period, CATL and Zhiji Automobile jointly built power batteries using "silicon-doped lithium-supplemented" technology, saying that they can achieve zero attenuation and "never spontaneous combustion" for 200,000 kilometers, and the maximum energy density of the battery core can reach 300Wh/kg.
The popularization and promotion of long-life batteries has certain significance for automobile companies, new energy users and even the entire industry.
First of all, for car companies and battery manufacturers, it increases the bargaining chip in the fight to set the battery standard. Whoever can develop or apply long-life batteries first will have more say and occupy more markets first. Especially companies interested in the battery replacement market are even more eager.
As we all know, my country has not yet formed a unified battery modular standard at this stage. At present, battery replacement technology is the pioneer test field for power battery standardization. Xin Guobin, Vice Minister of the Ministry of Industry and Information Technology, made it clear in June last year that he would study and compile a battery swap technology standard system and promote the unification of battery size, battery swap interface, communication protocols and other standards. This not only promotes the interchangeability and versatility of batteries, but also helps reduce production costs and improve production efficiency.
Enterprises that aspire to become the standard setter in the battery replacement market are accelerating their efforts. Taking NIO as an example, based on the operation and scheduling of battery big data, NIO has extended the life cycle and value of batteries in the existing system. This brings room for price adjustment of BaaS battery rental services. In the new BaaS battery rental service, the standard battery pack rental price has been reduced from 980 yuan to 728 yuan per month, and the long-life battery pack has been adjusted from 1,680 yuan to 1,128 yuan per month.
Some people believe that the construction of power exchange cooperation among peers is in line with policy guidance.
NIO is a leader in the field of battery swapping. Last year, Weilai has entered the national battery replacement standard "choose one from four". At present, NIO has built and operated more than 2,300 battery swap stations in the global market, and has attracted Changan, Geely, JAC, Chery and other car companies to join its battery swap network. According to reports, NIO’s battery swap station averages 70,000 battery swaps per day, and as of March this year, it has provided users with 40 million battery swaps.
NIO's launch of long-life batteries as soon as possible can help its position in the battery swap market become more stable, and it can also increase its weight in becoming a standard-setter for battery swaps. At the same time, the popularity of long-life batteries will help brands increase their premiums. An insider said, “Long-life batteries are currently mainly used in high-end products.”
For consumers, if long-life batteries are mass-produced and installed in cars, they generally do not need to pay for battery replacement during the warranty period, truly realizing "the same life span of the car and battery." It can also be regarded as indirectly reducing battery replacement costs.
Although it is emphasized in the new energy vehicle warranty manual that the battery can be replaced free of charge during the warranty period. However, a person familiar with the matter said that free battery replacement is subject to conditions. "In actual situations, free replacement is rarely provided, and replacement will be refused for various reasons." For example, a certain brand lists non-warranty scope, one of which is "vehicle use" During the process, the battery discharge amount is 80% higher than the battery's rated capacity."
From this point of view, long-life batteries are now a capable business. But when it will be popularized on a large scale, the time has not yet been determined. After all, everyone can talk about the theory of silicon-doped lithium-replenishing technology, but it still needs process verification and on-board testing before commercial application. "The development cycle of a first-generation battery technology will take at least two years," said an industry insider.
Post time: Apr-13-2024