Integrated die-casting: weight reduction and cost reduction drive the industry to increase production volume

We believe that integrated die-casting technology has the advantages of reducing weight, improving production efficiency, and lowering production costs. With the gradual application of Tesla and multiple new forces, the application of integrated die-casting in new energy vehicles has become a clear trend. We believe that all links in the industry chain are expected to benefit, and we remind investors to pay attention to investment opportunities in the track from three directions: equipment, materials, and manufacturing.
Reason
The innovation of vehicle body technology has always been centered on reducing vehicle weight while considering safety, and has gone through two stages: structural simplification and material replacement. In the early stages of the development of the automotive industry, non load bearing body structures were mainly adopted. With the advancement of design technology and the reduction of cost through economies of scale, load bearing body structures with simpler structures, lighter weight, and better fuel economy gradually became the mainstream choice for SUV and sedan body design after the 1950s. In the process of new energy transformation, the weight of the battery itself affects the range, and the cost of reducing its own weight by replacing steel with aluminum is lower than the cost of adding batteries to extend the range. Therefore, the process of lightweighting automobiles can continue to accelerate.
The advantages of weight reduction and cost reduction drive the increase of integrated die-casting penetration rate, and CTC may become a more long-term direction. Traditional car body manufacturing processes have many welding points and complex processes. Integrated die casting can achieve the integration of some or all car body components, reducing the complex process of separate stamping and welding after die casting. It has the advantages of high efficiency and low cost. According to Tesla's calculations, integrated die casting of the rear bottom plate can reduce the manufacturing cost of corresponding components by 40%. In the process of continuous development of integrated die-casting technology, the automotive industry has also made new demands for simplifying and reducing the weight of batteries. CTC technology has emerged, which eliminates modules and battery packs and integrates battery cells directly into the chassis, providing strong advantages in weight reduction and optimizing body layout. Currently, Tesla, Zero Run and other vehicle manufacturers have proposed CTC architecture, and we believe that CTC technology may become an important direction for the future development of pure electric body and chassis architecture.
The integrated die-casting industry has a broad space and high barriers to entry. Die casting factories have a greater scale advantage and technological accumulation compared to vehicle manufacturers, and are expected to occupy a larger market share. We expect that the market size of China's integrated die-casting manufacturing and material end will reach 17.8 billion yuan and 8.8 billion yuan respectively by 2025, with a CAGR of over 150% from 2021 to 2025; From the perspective of equipment, the global die-casting machine industry with a capacity of 6000 tons or more is expected to reach a scale of 4.72 billion yuan by 2025, with a CAGR of 96% from 2021 to 2025. From the perspective of barriers, we believe that integrated die-casting has three major barriers: equipment leading layout, material ratio, and mold design. The entry threshold is relatively high, and the competitive landscape is expected to be better than traditional die-casting. From the perspective of participants, both vehicle manufacturers and suppliers are actively laying out their presence. We believe that the competitive landscape of coexistence between vehicle manufacturers and third-party die-casting factories will continue, but third-party die-casting factories have more cost and technological advantages and are expected to occupy a larger market share.