Battery price war poised to drive down EV costs

The new cells from CATL, which supplies batteries to EV makers like Tesla, NIO, and XPeng, can be fully charged in under 30 minutes.

The world’s biggest EV battery manufacturer is poised to cut the cost of lithium iron phosphate cells by half by the middle of this year. CATL photo.

This article was published by The Energy Mix on March 7, 2024.

A price war for electric vehicle batteries is in the offing, with the world’s biggest battery manufacturer poised to cut the cost of lithium iron phosphate (LFP) cells by half by the middle of this year.

The new cells from CATL, which supplies batteries to EV makers like Tesla, NIO, and XPeng, “can be fully charged in less than 30 minutes,” The Driven reports, and will cut the cost of a 60-kilowatt-hour battery pack from US$6,776 to $3,380 in just 12 months. Since batteries are the most expensive part of an EV, the announcement points the way to lower prices for the vehicles themselves.

Shanghai-based CnEVPost says CATL and EV/battery manufacturing giant BYD are in a pitched battle to cut selling prices, with a BYD unit issuing an internal memo asking its development teams to find cost savings. “CATL and BYD are the two largest power battery makers, with the former having a global share of 37.4 per cent in the January-November period and the latter at 15.7 per cent,” the news story states, citing mid-January data from South Korean market researcher SNE Research. “As CATL and BYD cut prices further, smaller battery makers are poised to follow, and the cost of power batteries will be reduced further.”

CnEVPost has price and technical details on the evolving EV battery market.

On social media, technology futurist Tony Seba noted that today’s price curve for batteries is very close to what he predicted a decade ago, with LFP cells currently selling for less than $69.53 per kilowatt-hour. His hashtag for the post: #CostCurvesAreLikeGravity.

In 2014, Seba recalled, he predicted that lithium-ion batteries would hit $50 per kilowatt-hour by 2027. “That sounded insane to the linear mainstream, but it looks like China may reach that number sooner.”

 

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