Recently, Fengdong New City in Xian signed a project cooperation agreement with Inovance Technology. Inovance Technology will invest 1.6 billion yuan to establish the western headquarters and research and development center of Inovance Technology, as well as the manufacturing base for energy storage and power systems in Fengdong New City.
Inovance Technology is a leading enterprise in the field of industrial automation control in China, and was previously famous as the No.1 supplier of servo system and high voltage frequency converter in China. In recent years, the company has taken general automation as its basic disk, and its business has gradually expanded to emerging industries such as smart elevators, rail transit, new energy vehicles and industrial robots.
With the promotion of "double carbon" strategy and digital energy management strategy, Inovance Technology not only has a more concerned label-XPeng, an Li Auto supplier of electronic control products, but also becomes the TOP10 energy storage PCS shipments in the domestic market in 2022.
Energy storage expansion
On the recent investor interaction platform, Inovance Technology confirmed the above news, saying that the investment amount of R&D center and energy storage and power system manufacturing base invested by the company in Xi'an is 600 million and 1 billion respectively. It is reported that after the project is completed and put into production, it will realize an annual output value of 10 billion yuan, an annual tax revenue of 380 million yuan, and introduce more than 3,900 R&D and technical talents.
As early as September 2021, it was publicly reported that relevant persons from Xi'an High-tech Zone and Zhu Xingming, chairman and president of Inovance Technology, and other company executives attended the opening ceremony of Inovance Technology Xi'an R&D Center. In the same year, Inovance Technology once said that Xi'an R&D Center had been put into use, and recruited some personnel to do the bottom development of control layer software.
Relevant personnel of local government agencies said that the two projects signed this time will be upgraded to the headquarters settlement and R&D business in the western region, as well as the manufacturing business of energy storage converters, energy storage integrated machines, plasma power supplies and other equipment. In terms of energy storage business layout, besides Xi'an, Inovance Technology also established Nanjing Inovance Technology R&D Center Co., Ltd. in 2022, and its main business includes energy storage technology services.
It is worth mentioning that Inovance Technology also has a clear strategy for energy storage going global. According to the company's 2022 annual report, the overseas optical storage market is gradually explored by laying out the 20kW optical storage inverter product platform.
While the energy storage business is laid out in many places, the market scale of Inovance technology energy storage products is rapidly increasing, and PCS energy storage inverter has also become the "star single product" of the company's energy storage sector. According to statistics, Inovance Technology Co., Ltd. ranks third in the shipments of high-power PCS (30kW and above) in domestic energy storage of Chinese enterprises in 2022, and fourth in the shipments of high-power PCS (30kW and above) in global energy storage of Chinese enterprises.
Regarding the positioning and planning of the future energy storage business, the company publicly stated in the recent research activities that the energy management business including energy storage is the strategic business determined by the company. At present, based on energy storage, some energy management products and business models are extended. For the company, strategic business needs to be planned and laid out in the medium and long term.
Inovance Technology revealed that the current energy management business is mainly concentrated in network-side projects. For medium to long term, the company should transfer its energy management business to the industrial and commercial side. From the product point of view, in addition to the existing PCS energy storage inverter, it also extends to optical storage integrated machines, special power supplies, liquid cooling terminal products and so on. Business model for network-side projects, the company mainly sells PCS products to system integrators; For the business on the industrial and commercial side, the company will explore the role of system integration, and the current business model is in the process of building.
The rise of new energy vehicle business
While Inovance Technology accelerates the landing of power supply and energy storage projects, the business of new energy vehicles is rapidly rising. According to the company's annual report, in 2022, Inovance Technology's overall new energy vehicle business achieved sales revenue of 5.088 billion yuan, up 70.02% year-on-year, accounting for over 40% of the company's total revenue. In addition, the company also occupies 7% of the domestic market of electronic control products for new energy passenger cars, ranking third only to BYD and Tesla.
With the expansion of business scale, the expansion projects are speeding up. According to CHASING SECURITIES Research Report, the company's capital expenditure reached 1.662 billion yuan in 2022, a year-on-year increase of 113% and a record high. It is mainly invested in Suzhou, Changzhou, Nanjing, Yueyang and other production capacity projects, involving key components of new energy vehicles, industrial motors and other products. By the end of 2022, the scale of the company's construction in progress reached 1.75 billion yuan, a year-on-year increase of 157%.
"At present, in the field of electric drive system and power supply system, car companies generally use self-made or third-party manufacturers to meet the supply." A person from a new energy vehicle enterprise in Xi'an High-tech Zone told the 21st Century Business Herald reporter, "The new energy vehicle industry is a capital and technology-intensive industry. When selecting parts suppliers, vehicle enterprises need to comprehensively consider the supplier's response speed, multi-product solution capability, technology rapid iteration capability, lean production capacity and other factors. At the same time, because technologies such as all-in-one integration, high system voltage, flat motor, oil cooling and high speed are becoming important development directions in the future, vehicle enterprises often favor suppliers with solid technical reserves in these fields."
Inovance Technology's industrial control base is very solid, and the company has achieved the first echelon in the field of new energy passenger cars in China. Apart from BYD and Tesla, it has great advantages in market share, product production and downstream sales. As a supplier of new forces such as Xpeng and Li Auto, its own brand awareness, technology, experience and channels are relatively mature.
"At present, in order to further avoid the price fluctuation and pressure of upstream raw materials, it has almost become a general trend for car companies to develop their own power systems. As an upstream electronic control supplier, Inovance needs to deal with the problem of future sales shrinkage caused by self-research of downstream car companies. " He added.
Inovance Technology Business Expanse,Make Coordinated Efforts to Energy Storage and Energy Vehicle-China.exportsemi.com
