- Chinese EV battery manufacturer CATL, the largest of its kind in the world, plans to nearly half the cost that it sells lithium iron phosphate batteries to OEMs at.
- The battery in question will be targeted at EVs under the $30,000 mark, which hints that low-cost electric vehicles could be about to get even cheaper.
- CATL supplies batteries to EV manufacturers such as Tesla, Ford, Hyundai, Kia, and more.
Cheaper EV batteries
The batteries in question should have a reduced cost to manufacturers of approximately $60 per kWh. That’s compared to an industry average in 2023 of $139 per kWh, according to BloombergNEF. With contracts to big manufacturers such as Tesla under CATL’s belt, this cost reduction could have a major impact on the success in producing the upcoming Tesla Model 2 – the company’s cheapest EV so far, with a price point rumored to be under the $25,000 mark. If CATL is a potential battery provider for the Model 2, it could be significantly cheaper to produce and lower the price to consumers.
CATL isn’t the only player in the EV battery space, with LG Energy Solution and BYD also producing a significant proportion of the EV batteries in vehicles around the world. With CATL cutting costs like this, it’s inevitable that other manufacturers will follow, in order to stay an attractive option to OEMs, which could trigger a battery price war. Ultimately, this price reduction will translate into cheaper EVs for consumers in the near future.
Conventional lithium ion batteries aren’t the only solution that could make electric vehicles cheaper in the future, however. Emerging solid state batteries, the likes of which Toyota are planning to put into production by 2027, could have longer life expectancies, increased capacity, and cheaper manufacturing prices.
