-, Dec. 20, 2021 /PRNewswire/ --
Founded in 2001 and headquartered in Dalian, China, CBAK Energy Technology Inc.
(Nasdaq: CBAT) develops, manufactures and sells rechargeable
lithium-ion batteries currently applicable to household energy
storage and Light Electric Vehicles (LEV), and is building
production capacity targeting the Passenger Electric Vehicle (EV)
markets. CBAT primarily operates in China, and has business exposures to
Europe, South Korean, Israel and U.S. CBAT was listed on
Nasdaq in 2006 as the 1st US-listed Chinese lithium-ion battery
producer.
A leading cylindrical lithium-ion battery producer driven by ESG
mission. With 20 years of operational experience in the battery
sector garnering 75 patents, CBAT is the leading cylindrical
lithium-ion battery manufacturer and energy storage solutions
provider in China, having involved
major projects spanning 6 national scientific/technical projects,
30+ provincial/municipal projects. CBAT is also committed to
the development of new energy and environmental protection
technologies, aligned with the current thriving global trend.
Strategic capacity expansion positioned to tackle growing energy
storage and LEV/EV market demand. With global and
China market size for lithium-ion
batteries used in energy storage and new energy vehicles expected
to grow rapidly for the next 5 years and beyond, CBAT is expanding
its energy storage solution capacity at Dalian facility, targeting to reach 10 GWh by
2025. Its new Nanjing
facility has just completed phase 1 expansion with an output capacity of 2 GWh focused on the
EV/LEV market, targeting to reach 18 GWh by 2023 through phase 2
development. Overall, CBAT management envisions the Company's
total annual production capacity to grow to 30 GWh in 2025
respectively to tackle the growing market size.
Clear growth roadmap with diverse product rollout and industry
applications. The launch of special 26650 batteries built for
ultra-low temperature and the rollout of upgraded model 26700
batteries, coupled with production capacity expansion in model
32140 and 46800 batteries to be complemented by Solid-State
batteries, are collectively positioning CBAT as the top cylindrical
Lithium-ion battery producer to capitalize the growing market
demand from across energy storage, light-electric-vehicle and
electric-vehicle markets.
Strong partnerships and solid client base. The consistent high
product quality has enabled CBAT to form strong strategic
partnership and build a solid client base globally, including
strategic partnerships with VIESSMANN as its sole supplier in
China, and with Schneider and
Haier as the first step into the energy storage sector.
Synergistic vertical acquisition secured stable raw material
supply and incremental revenues. CBAT completed its
acquisition of 81.56% of equity interests in Zhejiang Hitrans
Lithium Battery Technology Co., a critical supply chain partner to
CBAT and a developer/producer of ternary precursor and cathode
materials. With Hitrans' annual production capacity of 12,000
tons of NCM precursors and 8,000 tons of cathode materials, both
expected to expand to 50,000 tons by 2023, this acquisition will
add raw materials, operational services and material recycling
capabilities to CBAT's existing production processes, and support
the Company's production capacity expansion with reliable raw
materials supply, meanwhile expanding its topline revenues to
include raw materials sales starting as early as December 2021, and further strengthening CBAT's
strategic position within the high-power lithium battery market and
new-energy vehicle ecosystem.
High product quality with great consistency. CBAT applies superb
quality control systems, and is certified by ISO9001, OHSAS18001,
ISO TS16949, ISO14000 and China Quality Certification Centre. CBAT
has built a track record where the average return-rate of goods
delivered in 2020 was significantly below a threshold of 0.03%, the
average monthly defect rate of key products delivered in 2020 was
approximately 4.5%, below the goal of lower than 7%, and no safety
incidents reported by its major clients for battery supply to EV
projects. Such consistency of high product quality has enabled CBAT
to build a solid client base, including SIEMENS, Haier, VIESSMANN,
Dongfeng Motor, LEVDEO, Han Tang Electric Vehicle, and many
others.
Technical advanced special battery launch built for ultra-low
temperature. CBAT has launched its special 26650 lithium-ion
battery, specifically designed for the ultra-low temperature
environment ranging from -40 to -50°C, while the regular
lithium-ion batteries cannot be recharged below 0℃, nor can the
power be properly discharged below -20℃. With the launch of this
special battery, CBAT can showcase its leading technical advantage
in the global markets. This special 26650 battery is ideal for base
station, unmanned aerial vehicle, aerospace vehicle and even
military usage. CBAT's customers have been testing the samples, and
the management is seeing growing demand for this special battery
from China's Northern region, as
well as from the aviation and aerospace industries.
Demonstrated high efficiency and price-to-performance
ratio. CBAT's cylindrical lithium iron phosphate batteries
have distinct advantages over prismatic batteries and ternary
lithium batteries. Relative to prismatic cells batteries,
cylindrical batteries are safety, easier to radiate heat and
control temperatures, and enjoy higher production automation
leading to 10-20% lower production costs; while compared to ternary
lithium batteries, lithium iron phosphate batteries have higher
temperature resistance, greater safety and stability, lower
production price and better cycle performance.
Proven product innovation driven by strong R&D. CBAT invests
in R&D, materials, production equipment and processes targeting
to improve product safety and quality. The Company entered a
three-year strategic agreement in January
2021 with JAC Motors, a top PRC vehicle manufacturer, to
jointly develop certain cylindrical lithium-ion batteries catered
to the auto industry, including model 46800 batteries, and entered
partnership with Changxing Sino-Russian New Energy and Material
Technology Research Institute (NEMTRI) to co-develop solid-state
batteries. Built on the mature technology of 32140 large
cylindrical batteries, CBAT already started the R&D of 46800
batteries in the 2nd half of 2021.
Business Overview
CBAK Energy Technology, Inc., formerly China BAK Battery, Inc.,
together with its subsidiaries are engaged in the manufacture,
commercialization and distribution of a range of standard and
customized lithium ion (Li-ion) rechargeable batteries, for the use
in an array of applications across LEV (light electric vehicles
such as electric bicycles, electric motors and sight-seeing cars,)
EV (e.g. electric cars, electric buses, hybrid electric cars and
buses), energy storage, uninterruptible power supply, electric
tools and other high power quality control applications.
Products & Solutions
26650 Battery is CBAT's matured model with reliable performance
Ideal for energy storage solution, currently the key cash flow
generator for CBAT. With continued innovations, 26650 batteries
specially designed for the ultra-low temperature environment has
paved the way for CBAT's geographic expansion.
32140 Battery offers great solutions for the Light Electric
Vehicles market, featuring 4X the capacity of regular batteries
(Model 26650) and 20% lower in cost. 32140 Production line has
completed, ready to partner with Chinese OEMs for new products.
46800 battery is the next-gen model targeting the Passenger EV
market, able to power faster acceleration, reduce battery loss and
prolong driving range at lower cost. This model is currently
under testing, with production expected to start in 2023.
Product Comparisons
Model 26650 - The 26650 battery is developed on the basis of the
18650 battery, where "26" and "18" refer to the outer diameter of
the battery. The 26650 battery has an electric charge capacity of
4-6Ah (depending on the type of chemical systems) and power energy
of 10-20Wh, and given its small size and flexibility for
battery-pack assembly, is particularly suitable for household solar
battery energy storage devices (required 4-10KW) and domestic
electric bicycle market (48-60V 10-20Ah), while not suitable for EV
as it demands much higher energy power (usually 40-100KWh) which is
better met with the Prismatic batteries (185-740Wh). If 26650
batteries were to be used for the EV, it would require a
battery-pack comprised of many more single batteries and
corresponding structural parts that that of the Prismatic
batteries. Meanwhile the BMS (Battery Management System)
involving more components would also increase accordingly,
resulting in higher costs.
The Energy Storage market is mainly divided into three types:
home, power station and base station energy storage. Although
CBAT's 26650 battery is mainly used for household energy storage,
the specially designed ultra-low temperature 26650 battery can
operate efficiently in low temperature environments, work normally
at a temperature of -40°C to -50°C, and can discharge at a rate of
60C at room temperature, and hence can be used in base stations,
unmanned aerial vehicles, aerospace, and military industries in
ultra-low temperature environments, making CBAT's strong technical
advantages and manufacturing capabilities of ultra-low temperature
batteries extremely competitive as the market's demand for
ultra-low temperature batteries increases.
Model 32140 – The battery volume of a single 32140 battery is
3.2 times, while the power energy is 4 times that of a single 26650
battery, meaning that the energy density is increased.
Compared to 26650 model, 32140 battery has better heat dissipation
and a lower manufacturing cost (less structural parts and less
complicated BMS than a battery-pack using 26650 batteries), more
suitable for low-speed electric vehicles which typically require a
battery with electric charge of 72V 100-120Ah.
Model 46800 - Compared with the 26650, the large cylindrical
46800 battery has higher energy density and lower battery-packing
cost. It adopts CTC technology (Cell to Chassis) in integrating the
battery directly into the chassis, with reduced number of battery
cells and corresponding structural parts needed in the whole
battery-pack to create higher energy density, simply the BMS and
lower the overall packing cost.
Given that the height of the EV chassis is generally below
100mm, and the height of the 46800 battery is 80mm, the battery can
be placed vertically on the EV chassis, which is the most suitable
battery size for CTC technology. On the other hand, as the 32140
battery has a height of 140mm, it can only be placed flat on the EV
chassis, where not only the packing design is complicated, the
energy density is lower, and the cost is consequently higher.
Cylindrical 46800 vs. Prismatic Battery – Under the same type of
chemical system, the energy density of Cylindrical 46800 batteries
is 3-10% higher than that of Prismatic batteries. It is
easier to automate the production and assembly of the battery-pack
using 46800 batteries with higher consistency and longer
service-life than using Prismatic batteries. And in terms of
cost, since the degree of automation is high, the production cost
is 10-20% lower than that of the Prismatic battery. The steel
shell used in the 46800 is far stronger than the aluminum shell of
the prismatic battery, 46800 batteries are also safer than the
Prismatic batteries, by avoiding the leakage caused by the rupture
of the aluminum shell and other potential problems.
46800 model adopts the CID safety design, where the circuit can
be disconnected by itself under conditions such as external short
circuit, while the Prismatic battery has no such safety design
embedded. By using CTC technology in battery-packing process, the
energy density of the whole pack can reach or even exceed that of
the battery-pact using the Prismatic batteries.
Two Production Facilities
Dalian Facility - Focused on energy storage solutions:
Built in 2013 and covers 154,000 square meters, this facility
primarily focuses on manufacturing CBAT's mode 26650 batteries
catered to the energy storage sector.
As of Q3 2021, the facility has a production capacity of 1GWh,
and gradually grow to 10GWh by 2025.
A new production line with an initial annual capacity of 0.4GWh
for its new 26700 battery model was added and started operation in
Q3-2021.
Nanjing Facility – Focused on the EV/LEV markets
Phase 1 - Subsidized by the Nanjing government, this facility covers
10,000 square meters and is on track to complete construction by
the end of 2022 to reach a total annual production output capacity
of 2 GWh. Production line and manufacturing equipment with an
initial annual capacity of 0.7GW were already installed and tested,
and had started the commercial production and deliveries of 32140
batteries in Q4-2021, while simultaneously ramping up the output to
its full capacity by adding additional 1.3 GWh in 2022.
Phase 2 – This phase of construction will cover an area of
73,000 square meters, with design work completed and expected to
commence construction by the end of 2021. CBAT originally planned
for an annual capacity of 6 GWh, which was raised to 18 GWh for a
mixture of 32140 and 46800 batteries production to accommodate
growing demands, according to the Company's press release on
November 19.
Lithium Battery and EV market Growth Projections
The global and China market
size for Li-ion Batteries used in Energy Storage is expected to
grow at a respective CAGR of 45% and 53% from 2020 to 2025.
Sales volume of new energy vehicles from outside-of-China and China is expected to grow at a respective CAGR
of 41% and 35% from 2020 to 2025.
Compared with the traditional batteries, lithium batteries have
the characteristics of complete charge and discharge, high
capacity, energy saving and environmental protection, light weight,
and no memory effect.
Currently, the lithium battery industry has three major
markets:
- Digital products, such as computers, mobile phones, earphones,
and electronic watches.
- Energy Storage, such as household energy storage, energy
storage power stations, etc.
- Electric vehicles, such as electric cars and electric power
stations, bicycles, electric trucks.
Energy Storage customers have put forward stringent requirements
on battery life and capacity, demanding the battery capacity of no
less than 80% of the normal capacity after a service life of 10
years or following 8000 cycles. In 2016, customers demanded even
higher requirements for battery capacity. For example, in 2016,
customers demanded 3Ah for 26650, but this year, customers demanded
4Ah, but battery life is still the above-mentioned requirement.
Electric bicycle customers, electric vehicle customers, and
low-speed electric vehicle customers also pay attention to battery
temperature, and generally require that the 1C rate discharge
battery pack's temperature does not rise above 60°C.
Besides battery energy density and costs, battery customers also
pay attention to how the battery's discharge capacity performs
under different temperatures, and how fast the capacity decay
during the storage.
Cylindrical versus Prismatic Batteries
The degree of automation for cylindrical batteries is high, and
the production cost is 10-20% lower than that of prismatic
batteries. The cylindrical steel shell is far more resistant
to deformation than the aluminum shell of the prismatic battery,
avoiding liquid leakage and squeezed wiring harness leakage caused
by the rupture of the prismatic shell during use.
Additionally, as the CID safety design is adopted in cylindrical
battery production, the battery can be disconnected by itself under
conditions such as external short circuit, whereas the prismatic
battery has no relevant safety design. Under safety failure
conditions, such as a single battery exploding for some reason, a
cylindrical battery does not necessarily cause the entire pack of
batteries to explode, and even it does, it would take a long while
for a single explosion to cause the entire pack to explode or burn,
allowing the driver to escape, versus the case in prismatic-battery
pack, the single explosion could cause explosion or burning of the
whole pack quickly, given prismatic battery's larger energy
(185Wh-740Wh). Prismatic battery also does not perform well under
the low-temperature environment.
On the flip side, cylindrical batteries are disadvantaged
compared to prismatic batteries. Due to the low capacity of
cylindrical batteries, more batteries and structural parts are
required for the battery pack, compared to the prismatic
batteries. At the same time, the battery management system
BMS will have more complex algorithms owing to the increased number
of batteries needed.
In addition, as China domestic
BMS algorithm is still below the level of Tesla, the battery life
of cylindrical battery-pack is shorter than that of prismatic
battery pack, despite that cylindrical battery has higher
consistency. Meanwhile, due to the low energy density of the
small cylindrical battery cells and the low utilization rate of the
pack space, the energy density of the cylindrical battery pack is
lower.
The use of prismatic batteries has become the mainstream in
China, as the national subsidy
policy is mainly based on the energy density of the battery
pack. Nevertheless, with the advancement of material
technology, large cylindrical battery technology and packing
technology, the energy density of large cylindrical batteries has
now reached or even surpassed that of prismatic batteries, and is
expected to gain more adoption and traction in China and globally.
Tesla have been in favor of cylindrical batteries in recent
years. Cylindrical batteries have achieved a large number of
applications and developments, from 18650 at the beginning, to
21700 three years ago, and to 46,800 in the next few years. Similar
to the development of prismatic batteries, cylindrical batteries
development is also gradually towards larger sizes.
Competitors
Currently, Guoxuan Hi-Tech and Anchi Technology are two main
32140 batteries producers in China.
As to 46800, many domestic companies have deployed a plan to
produce 46800 batteries; however only BAK Battery (BAK) has
officially released the battery cell so far. BAK plans to
build a new large cylindrical battery production line at its
Zhengzhou plant, with mass
production expected to achieve in the second half of 2022, and
reach the planned maximum battery production capacity of 15 GWh
each year.
Yiwei Lithium Energy stated that it has completed the strategic
layout of large cylindrical batteries and will gradually promote
large cylindrical batteries in 2023. Yiwei Lithium Energy
plans to deploy two large cylindrical batteries, namely 46800 and
46950, expected to release a production capacity of 20 GWh in 2023,
and reach 40 GWh in 2024.
Third Quarter 2021 Financial Highlights
Strong high power lithium batteries sales year-over-year
growth. Absence of any opportunistic raw material trading
gain, Q3-2021 revenue of approximately $9.6
million was almost entirely from the sales of high power
lithium batteries (uninterruptable power supplies), representing a
51% year-over-year growth from high power battery sales in
2020. The notable year-over-year revenue growth is a
testament to the strong demand for the Company's high-performance
products, enabling CBAT to charge higher selling prices to pass on
higher production costs.
Slightly lower gross margin due to price inflation in raw
materials. Gross profit was $1.1
million, a decrease of 17% from $1.4
million in the same period of 2020. Nevertheless, efforts
made to lock in certain raw materials supply previously has helped
avoid a bigger blow from commodity price hikes in the quarter, and
gross margin only declined by 1% to ~12% from the same period of
2020, mainly due to the increase in raw materials prices from
inflation.
Operating expenses increased 339% year-over-year due to R&D
and headcount investment geared for Nanjing facility expansion. CBAT
registered an operating loss of $3.2
million, compared to operating profit of $0.4 million in the same period of 2020, mainly
due to growing headcount and R&D expenses (up 307%
Year-over-year) associated with the Company's Nanjing production facility, as well as the
expiration of government's COVID-19 relief policy.
Net Income benefited from change in the fair value of
outstanding warrants, where market price was lower than the
exercise price, leading to reduced warrant expenses. GAAP net
income increased to $20.0 million in
the quarter, or $0.23 per ADS from
$41,715 in the same period of
2020. The huge jump was attributable to the change in fair
value of warrants of $23 million in
the 3rd quarter.
Cash and cash equivalents were US$2
million as of September 30,
2021, down from $33.3 million
as of June 30, 2021, mainly due to
higher R&D spending of ~$2
million and Hitrans acquisition cash payment (deposit of
~$8 million and loans to Hitrans of
~$20 million as part of acquisition
price.)
Production expansion as planned. Targeting to augment the
Company's ability to supply and address growing and diversified
batteries demands, CBAT's production capacity expansion went ahead
as scheduled, despite the global energy shortage and commodity
price hikes, meanwhile making important progress in R&D to
further extend its product portfolio.
In the third quarter, CBAT added and started operating a new
production line with an annual capacity of 0.4GWh of its new 26700
battery model, an upgrade of the original product 26650 batteries
at Dalian facility. Compared
to model 26650, 26700 battery has a bigger unit capacity while at a
significantly lower cost, particularly suitable for the
light-electric-vehicles. With the completion of a shakedown test
for model 26700 batteries, CBAT is seeing positive responses from
two-wheel light electric vehicle producers and energy storage
sectors. Output from this new production line was ramped up
in November, and the production in Dalian facility was supposed to last until
Q2-2022 fulfilling the orders already received. However due to the
new contamination measures adopted by the city Dalian due to Covid-19 variant, operation of
this new line, along with its existing production lines in
Dalian have been suspended for the
time being.
Production capacity expansion in model 32140 and 46800 batteries
was also being executed as planned. Together with the launch of
special 26650 batteries built for ultra-low temperature and the
upgraded model 26700 batteries are strategically positioning CBAT
as the top Lithium-ion battery producer to capitalize on emerging
opportunities in a broader market across energy storage and EV/LEV
applications.
Special ultra-low temperature batteries secured certification.
Dalian CBAK Power Battery is the world's first company to receive
certification for the ultra-low temperature battery. In
August 2021, CBAT secured the
performance certification from the world's leading testing,
inspection and certification company SGS for its special 26650
lithium-ion battery specifically designed for use in ultra-low
temperatures, paving the road for the Company to expand into
different markets and new applications. This model is already
completed testing, ready for commercial production.
Acquired battery raw material supplier Hitrans Lithium Battery
Technology Co. Following the closing of previously announced
acquisition on November 29, 2021 upon
completing asset transfer, CBAT now owns 81.56% equity stake in
Zhejiang Meidu Hitrans, which has been a critical supply chain
partner to the Company. With the acquisition closed, CBAT will
start combining Hitrans' financials statements as early as
December, 2021, further easing supply chain challenges while adding
to the Company's topline revenues. Hitrans' capabilities in
scientific innovation and new technology application will enable
CBAT to lead new business developments and support R&D of
high-performance products, together to seize growing opportunities
in the burgeoning electric vehicle industry.
With increased production capacity, management is confident that
the Company is on track for solid business growth through enhanced
and expanded product offerings.
Experienced Management Team
Yunfei Li/Chairman, President
& CEO
20 years of management experience in real estate development,
battery, and new energy industries.
Served on management positions for several new energy and real
estate development companies.
Weneu Wang, VP & Nanjing Facility General Manager since
2018
Former CFO of CBAK from 2014 - 2019.
Served as financial director of BAK Tianjin from 2013 to
2014.
Previously in charge of auditing, accounting, and consolidation
of BAK India since 2010.
Xiujun Tian, Deputy General
Manager & General Engineer
15 years of experience in Li-ion battery R&D and technical
management.
Former technical director of Weltmeister.
Previously in charge of the establishment of Dalian BAK and its
production lines.
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SOURCE CBAK Energy Technology Inc.