Alternative energy vehicle enterprises seldom choose domestic battery due to less profit

From 2014, the sales volume of alternative energy vehicles in China began to increase fast, which initiated the short demand of battery and influenced the delivery of new energy vehicles. But related Chinese battery companies didn't get enough profit from this opportunity.

As related statistical data shows, there had been 7 related Chinese battery companies whose net profit declined YoY, among 13 companies releasing 1st quarterly reports. And other companies got profit in 1st quarter due to other reasons except for battery business.

Auto analysts figure there are 2 main reasons why related Chinese battery companies don't got profit from the short demand of battery. One is the total demand of new energy vehicles in 2014 was only less than 100,000. So the capacity of related components was still excess. The other reason is the investment of related new energy industry started as early as in 2009, much earlier than the increased demand in 2014. Most related companies are still under cost amortization. Another auto analyst also told reporter the price war among new energy industry took down the gross profit rate of whole industry.

As reporter knows, foreign auto manufacturers including Tesla and BMW will choose transnational battery suppliers and self-owned brands including BAIC, SAIC and GWA hope to master power battery technology by joint venture or purchase. A principle in self-owned brand new energy vehicle enterprise told reporter there were many big gaps between Chinese and transitional battery suppliers such as integration, consistency and safety.