One of Xpeng Motors' local suppliers recently signed an agreement to supply an NIO subsidiary with drive motor components, which analysts see as a sign that NIO is aggressively introducing local supply chains and reducing costs.
Zhejiang Founder Motor Co Ltd, which is engaged in research, development, manufacture, and sale of micro special motors, and Weiran (Nanjing) Power Technology Co., Ltd. recently signed a framework agreement for the supply of drive motor components.
This is the first time Founder Motor has launched such a product and its first collaboration with an NIO family company. There was no word on when supplies will start and what the size of the order will be.
One of Xpeng Motors' suppliers to supply drive motor components to NIO subsidiary
According to Haitong Securities analysts Chen Ping, Xie Lei, and Yin Ling, the supply framework agreement reflects NIO's commitment to enhancing the local substitution of components and reducing costs.
At the same time, they believe that IGBTs, the heart of new energy vehicles, are expected to benefit deeply from the trend of local replacement of EV components.
IGBTs are the core components of electronic control systems and DC charging stations for new energy vehicles, and their cost accounts for 10% of the cost of new energy vehicles and 20% of the cost of charging stations.
The following is a translation of the full report:
Zhejiang Founder Motor Co Ltd and Weiran (Nanjing) Power Technology Co., Ltd. have reached a framework agreement on the supply of drive motor components to Weiran for a certain project.
The agreement stipulates that the product supplied by Founder Motor to Weiran Power is the first product of Founder Motor that adopts the flat-wire motor winding type, which improves the power density and efficiency of the motor by a large margin compared with the existing products.
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The successful implementation of this project and the establishment of the supply relationship with Weiran indicates that Founder Motor has the ability to supply world-leading new energy vehicle drive motor products and to serve first-class customers.
We believe that the supply framework agreement reflects NIO's commitment to strengthening local substitution of components and reducing costs.
Weiran Power is a subsidiary of NIO (NIO.N), a leading high-end new energy vehicle brand in China.
We believe that the agreement between Weiran and Founder Motor reflects NIO's active involvement in the local supply chain to reduce costs.
IGBTs, the heart of new energy vehicles, are expected to benefit from the local trend of local substitution of electric vehicle components.
IGBTs are the core components of electronic control systems and DC charging stations for new energy vehicles, accounting for 10% of the cost of new energy vehicles and 20% of the cost of charging stations.
Due to the rapid development of new energy vehicles/charging piles and other emerging markets in the next few years, semiconductor power devices such as IGBTs will usher in a golden development period.
We judge that IGBTs will be the first to benefit from the local EV component local substitution process.
China is the world's largest consumer of power devices, and the space for domestic substitution is huge.
With reference to StarPower Semiconductor's 2019 annual report, China is currently the world's largest consumer of power devices, and the growth rate of China's power semiconductor market is higher than the global growth rate.
TrendForce data shows that China's power semiconductor market size was 259.1 billion yuan in 2018, with IGBT as the fastest-growing mainstream device.
Among the country's seven strategic emerging industries, IGBT is an indispensable semiconductor device for the new energy industry, new energy automotive industry, energy conservation and environmental protection industry, and high-end equipment manufacturing industry.
With the rapid development of these industries, it provides a broader market for IGBTs.
According to the production and sales data released by the China Automobile Association, in 2019, China's production and sales of new energy vehicles will be 1.242 million and 1.206 million respectively.
With the gradual increase in the replacement rate of new energy vehicles, it will continue to drive the demand for the IGBT modules market.
According to Industry Online, China's sales of inverter air conditioners, inverter refrigerators, and inverter washing machines reached 64.341 million units, 16.657 million units, and 21.633 million units in 2018, with year-on-year growth rates of 8.8%, 31.1%, and 24.5%, respectively, all higher than the overall growth rates of air conditioners, refrigerators, and washing machines.
With the vigorous promotion of energy conservation and environmental protection, the penetration rate of inverter home appliances is expected to further increase, and the sales potential of IGBT modules for inverter home appliances is huge.
In addition, the demand for IGBTs in new energy fields such as photovoltaic and wind power has increased significantly, and there is much room for domestic substitution of IGBTs.
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