[YesAuto News] On June 8, BYD (002594) issued an announcement on “Adjustment and Change of the Use of Part of the Company’s Non-public Issuance of Funds and the Verification Opinions of the New Implementation Entity”. According to factors such as the situation and the development needs of the company, the company plans to adjust the total amount of funds raised from the original investment project “Iron Power Lithium-ion Battery Expansion Project” from RMB 6 billion to RMB 5 billion; in addition, the company plans to raise funds from the project. RMB 1 billion will be used for the “12 gigawatt-hour (GWh) power lithium battery construction project” invested and constructed in Qinghai.
BYD said that under the premise of meeting the company's internal needs, Qinghai's “12GWh power lithium battery construction project” products will be sold in the domestic and international markets. The company will make use of the group's strong domestic and foreign marketing network for product market development and sales, and conduct close and targeted contacts and publicity with potential customers.
It is reported that the Qinghai battery project is expected to use raised funds of RMB 1 billion, and the remaining part will be resolved by the implementing entity through self-financing. The project covers a total area of 1.028 million square meters, with a construction period of 24 months, and is located in Nanchuan Industrial Park, Xining Economic and Technological Development Zone.
Obviously, BYD’s investment in the construction of the “12 GWh power lithium battery construction project with an annual output” is backed by policy trends: it is mentioned in the “Energy-saving and New Energy Automobile Industry Development Plan (2012-2020)” issued by the State Council. In 2020, my country's new energy vehicle market will hold 5 million vehicles. At the same time, it is estimated that by 2025, the total demand for the power battery market will reach 100 billion in annual output value, and the economic impact may reach trillions. As early as 2014, the “Qinghai Province 100 billion yuan lithium battery industry development plan” also clearly stated that a nationally influential 100 billion yuan lithium battery industry base will be built in Qinghai, and proposed “Salt Lake Lithium Carbonate-Cathode Material-Anode Roadmap for the development of lithium industry bases such as materials-electrolytes, diaphragms-energy storage and power batteries-electric vehicles.
In fact, the rise of the “dark horse” Ningde era has always challenged BYD's position as the “dominant power battery” in China. Public information shows that from 2017 to the first quarter of 2018, CATL's market share has always surpassed BYD. In April 2018, BYD topped the list with 1.34GWh of installed capacity, and the monthly installed capacity surpassed the Ningde era again after a lapse of one year. Therefore, for BYD, “the product plans to sell in the domestic and international markets under the premise of meeting the company's internal needs” will be a big boost to its installed capacity.