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2019/2/19 Gross Margin for Power Batteries will be Less Than 10%


Industry experts generally believe that the accelerated shuffling of power battery industry, intensified competition, subsidies decline will lead to a significant decline in battery prices and a decline in gross profit of enterprises. The purchase price, material cost and depreciation of equipment are also important factors affecting the gross profit rate of battery enterprises. According to the feedback information from many parties, the gross profit rate of power battery enterprises generally declined sharply in 2018, and even the average gross profit rate of power battery business in some enterprises is less than 10%.

The profit margin of power battery companies is being gradually swallowed up, and the battery companies have a strong desire to reduce costs in the short term. Liu Yanlong, secretary-general of China Chemical and Physical Power Industry Association, predicts that battery companies will try to make up for this by reducing costs to upstream diaphragms and electrolyte enterprises, as well as improving efficiency measures such as standardization and large-scale production.

Never forget the past, the teacher of the future. With the abolition of domestic subsidies for new energy vehicles in 2020, power battery companies will face a greater shuffle in the future. With the rapid development of the market, many enterprises have exposed crises in the process of eliminating the fittest and the fittest. The investment risk of power battery industry will be further increased, especially for "layman" enterprises.

Issued by Tom, M&S, Feb. 19, 2019.

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