What Are The Issues That Need To Be Solved For The Power Battery Industry Chain Companies?

- Mar 26, 2020-

What Are the Issues that Need to Be Solved for The Power Battery Industry Chain Companies?

The epidemic situation has not been completely resolved. For many companies, it is still an urgent task for industrial chain companies to face difficulties in returning employees, limited resumption of production, shortage of epidemic prevention materials, high funding pressure, inconvenient logistics, and blocked business communication. Governments at all levels can orient their support to help enterprises resume normal operations.

A new crown pneumonia epidemic that began and spread at the end of 2019 disrupted the lives and work rhythms of Chinese people. In order to prevent the spread of the epidemic, most industries were basically in a state of shutdown and the power battery industry chain was not spared. After nearly two months of joint efforts throughout the country, the domestic epidemic of new pneumonia has been effectively contained, and national life, economy, and society have gradually returned to normal.

In late February, the China Chemical and Physical Power Industry Association and the Battery China Network launched the “Questionnaire for the Resumption of Production and Resumption of Enterprises under the New Crown Epidemic 2020”, hoping to understand the true status and difficulties of the first-line battery industry chain companies and find the industry ’s “urgent priorities” And summarize the relevant situation and feedback to relevant departments to help enterprises resume production operations as soon as possible.

As of March 15, we have received nearly one hundred questionnaires. Participating companies cover multiple links in the new energy vehicle industry chain such as lithium battery materials, equipment, batteries, and complete vehicles.

Most companies have not fully resumed work

We sorted out the questionnaire and found that about 36.59% of the companies have resumed work, 56.10% of them have resumed work, and 7.32% have not yet resumed work. From the perspective of regional distribution, the battery industry chain companies that have resumed work are mainly concentrated in Guangdong, Shandong, Henan, Jiangsu, and Tianjin, while the Hubei companies participating in the survey have said that they have not resumed work (time until March 15). The rest of the enterprises are mainly based on partial resumption of work.

Factors affecting the resumption of work include difficulties in returning employees to work, shortages of epidemic-resistant supplies such as masks, disinfectants, and alcohol, limited logistics and transportation, affecting production progress, insufficient supply of upstream raw materials, insufficient demand for downstream orders, and requirements for resumption policies in various places.

Order decline is more obvious

Up to now, the nationwide prevention and control of new crown pneumonia has been carried out for nearly two months, and has also affected the production of various industries. The January-February production and sales of power batteries and downstream vehicles have fallen off cliffs. According to the data of the China Automobile Association, the production and sales of new energy vehicles in China from January to February were 53,840 and 59,705 respectively, a year-on-year decrease of 63.8% and 59.5%. Among them, the output and sales of new energy vehicles fell by 82.9% and 75.2% in February. Power battery application branch data shows that China ’s new energy vehicle power battery installed capacity was 2.91GWh in January-February this year, a sharp decline from 7.22GWh in January-February 2019; of which, the power battery installed capacity in February this year was only 597.31MWh, The year-on-year decline was as high as 73.24%.

The impact of the epidemic on the recent orders of enterprises is also obvious. Affected by the epidemic, 53.66% of the companies participating in the survey indicated that orders fell from January to February this year, and some companies' orders fell by more than 80%; about 29.27% of the companies said that orders from January to February this year were the same as last year; only 17.07% of companies reported an increase in orders.

Increased operating costs of enterprises

Limited resumption of work, shrinking market demand and reduced orders have made the pressure on business operations increase sharply during this period, especially in small and medium-sized enterprises.

A number of companies participating in the questionnaire survey said that due to the incomplete recovery of production, current employees' wages, social security, rent, taxes, etc. have caused greater operational pressure on the company. At the same time, some enterprises are facing financial constraints, high financing costs, and difficult financing issues, and they hope that governments at all levels can support and help solve them.

In order to alleviate the pressure of enterprises and help them resume production, we have summarized the key demands of enterprises in the questionnaire as follows:

1. Employment support: Promote enterprises to resume work as soon as possible, strengthen logistics guarantee, personnel safety guarantee (provide masks, alcohol and other epidemic prevention supplies), appropriately classify epidemic situation prevention and control, and relax the approval of reworkers at low risk; assist companies in recruiting and facilitate travel .

2. Financial and tax support: tax reduction and social security, extension of tax and social security payment period.

3. Targeted subsidies: subsidies for factories / rentals for difficult enterprises, special period subsidies for labor and talents; increased subsidies for energy consumption such as electricity, materials and water.

4. Reduce financing costs: Give a certain discount loan support, and introduce a loan discount policy to reduce corporate financing costs.

5. Logistics support: Coordinating the docking of logistics companies with enterprises and resuming logistics transportation as soon as possible; strengthening the guarantee of material supply and cargo transportation.

6. Upstream and downstream industry chain: Cooperate with the upstream and downstream production and resumption of production in the industrial chain to ensure the effective connection of the supply of all links; the supplier support is completely liberalized.

7. Introduce policies to stimulate consumption: such as stimulus policies for new energy vehicles to promote industrial recovery.

8. Increase support for foreign trade business, such as facilitating customs clearance and export tax rebates.

In order to ensure the normal operation of production and construction and reduce the pressure on enterprises in various links, the Chinese government has issued a number of policies in the past two months to help enterprises resume work and resume production. Some companies have stated that it is necessary to ensure that relevant national policies, such as water and electricity price reductions and tax reduction policies, are truly implemented in various places.

In the near future, we will continue to collect more industry voices, and will submit them to the industry authorities as soon as possible after finishing the feedback from the enterprises, helping the enterprises to successfully overcome the difficulties and resume normal production operations. We also welcome more companies to report to us through multiple channels in a timely manner the problems encountered in the recent resumption of production and production.