CATL & BYD Expects EV Battery Prices To Come Down By 50%

One of the key factors towards the evolution of the electric vehicle (EV) space is the lowering of battery prices. Fortunately, key players like CATL and BYD are making significant strides towards making this happen and estimates up to 50% reduction in cost by the end of 2024.

CATL, in particular, is aggressively pursuing cost reductions in order to maintain its market share. According to reports, the company intends to reduce the price of its lithium iron phosphate battery cells to RMB 0.4 per Wh, or US$56.47 per kWh. This dramatic reduction could reduce the cost of a 60 kWh battery pack from $6,776.00 to $3,388, resulting in significant savings for EV manufacturers.

While the anticipated decrease may not reach 50%, there is hope that prices will fall further, with projections indicating even lower costs per kWh. This would eventually lead to lowering the cost of EV manufacturing and production of cheaper EV for the consumers.

BYD, another major player in the battery market, is also focused on lowering costs. With internal directives encouraging teams to continue cost-cutting efforts, the company hopes to remain competitive in the changing landscape of electric mobility.

According to data released by South Korean market researcher SNE Research on Jan 9, CATL and BYD are the top two battery manufacturers, with CATL accounting for 37.4% of the global market while BYD 15.7%.

Furthermore, advancements in battery standards, like that of German VDA specification is also poised to help to further reduce costs. CATL plans to produce VDA-spec lithium iron phosphate cells with fast charging capabilities at an average cost of RMB 0.4 per Wh by the third quarter (Q3) of 2024.

As CATL and BYD continue to lower their prices, smaller battery manufacturers are expected to do the same. However, in a broader sense, faster charging technologies and a larger network of dependable EV chargers are equally important for widespread adoption of electric vehicles.

In Malaysia, we have yet to have any significant player in the EV battery manufacturing space. However when it comes to charging infrastructure, the government has set an ambitious target of 10,000 EV charging stations by 2025.

This however would necessitate some rethinking given the relatively slow rate of roll-out, exacerbated by complications in licensing and local council approvals.