CATL and BYD are set to halve battery prices in 2024, with CATL focusing on optimizing production resources to achieve cost reductions.
This initiative is expected to bring down the price of it VDA specification lithium iron phosphate battery cells to RMB 0.4 per Wh, equivallent to USD 56.47 per kWh. As a result, the cost of 69kWh battery, currently priced at USD 6,776 is projected to decrease to USD 3,388 within a year, saving EV manufacturers over USD 3,000 per vehicle. Cao Li, vice president of Leapmotor, anticipates further reduction in battery prices, with the price of VDA battery cells potentially dropping to RMB 320/kWh.
VDA battery cells, originally developed in Germany, conform to specific dimensions and are favoured for their rectangular prismatic shape. CATL plans to supply automakers with 173 Ah VDA-spec LFP cells boasting 2.2C fast charging capabilities at an average cost of RMB 0.4 per Wh, significantly lower than the previous prices. BYD’s battery manufacturing division, FinDreams, aims to match CATL’s efforts by intensifying cost reduction measures.
The decline in battery prices is a significant development for the electric vehicle (EV) industry, potentially driving increased adoption. However, challenges such as changing infrastructure and market regulations remain, particularly in regions like the US where protectionist policies hinder access to competitively priced batteries from Chinese manufacturers like CATL and BYD.
