Battery costs had been falling for greater than a decade earlier than turning greater in 2022. That started to reverse late final yr in China.
“There’s a price war going on. We’ve seen it some weeks ago at the vehicle level. We’re now seeing it at the battery level,” Eric Norris, president of Energy Storage at Albemarle Corp., the world’s largest producer of lithium for EVs, instructed Reuters.
CATL, he mentioned, was trying to attempt to reap the benefits of its integration “to cut prices to gain share”.
Spot costs for lithium carbonate in China have dropped by about 30 p.c since their peak final yr, as inventories had been bought down on concern the tip of nationwide EV subsidies in China would gradual progress. That occurred, as predicted, in January.
For CATL, the low cost is a strategy to head off a bid by Chinese EV makers to hunt alternate options.
Li Auto has mentioned it’ll use SVOLT batteries in its new L7 crossover. Xpeng has developed a fast-charging battery with Sunwoda. The firm mentioned final yr that CATL was not its largest battery provider.
In a transfer that might reduce its reliance on CATL, Nio is planning to construct a brand new battery plant with annual capability to provide sufficient to energy about 400,000 long-range EVs, Reuters reported on Friday.
SVOLT, amongst CATL’s smaller rivals, has additionally supplied reductions on battery provides, Chinese media have reported. SVOLT declined to remark and Reuters couldn’t verify these reviews.
Electric automobile demand in China has slowed, with the main trade affiliation predicting 35 p.c progress in 2023, in comparison with 90 p.c in 2022.
Outside China, CATL, which is constructing new battery vegetation in Germany and Hungary, is increasing quickly and has offers to provide Ford Motor Co. and BMW Group. CATL batteries energy Volkswagen’s ID collection and Tesla’s Model 3 and Model Y in-built China. Nearly 40 p.c of these Teslas had been shipped to abroad markets in 2022.
Battery cell costs for EV makers rose about 24 p.c final yr, mentioned Prabhakar Patil, a battery trade advisor based mostly in Detroit. The CATL supply would signify a complete low cost of about 6 p.c from prevailing costs in China, if an automaker used it to lock in half of deliberate purchases, in response to an estimate by Changjiang Securities.
“The reductions that CATL is offering would help the Chinese EV industry,” mentioned James Frith, a principal at battery-tech targeted enterprise capital group Volta Energy Technologies. “From the Chinese viewpoint, with China having the dominant electric vehicle market, they don’t want to lose that momentum.”
“If some of those EVs with discounted batteries end up in Europe,” Frith added. “it could cause trade tensions.”
Source: www.autonews.com