The price of power batteries may plummet, and the price reduction of new energy vehicles is just around the corner?
Text/Civil Engineering
In fact, since last year, as the price of lithium carbonate, the core raw material of power batteries, has plummeted, there have been news that power batteries will be greatly reduced, but it has not been confirmed.
But in the last two days, this news has been grounded. According to domestic media reports, CATL and BYD, as domestic power battery giants, have recently promoted cost reduction, and the prices of their new batteries have also ushered in a huge reduction.
In terms of CATL, it is promoting 173Ah VDA specification lithium iron phosphate cells, which are equipped with 2.2C rate fast charging as standard, and the price of the battery cells does not exceed 0.4 yuan/Wh. As a comparison, the average price of square lithium iron phosphate cells in the same period last year was about 0.8-0.9 yuan/Wh.
At the same time, BYD's Fodi battery was also revealed to have recently notified the team to continue to reduce costs, saying that the current procurement cost reduction space is still huge.
At present, the biggest cost problem faced by new energy vehicles is still the cost of batteries, after GAC CEO said in a public speech that the cost of batteries accounts for about 40%-50% of the cost of the whole vehicle, and the cost accounts for almost half, which is working for CATL.
Therefore, in the future, if new energy vehicles want to increase their market share, they must first reduce the cost of batteries, and then reduce the cost of the whole vehicle to gain competitiveness.
At present, the trend of "battery self-development" of car companies is also intensifying. For example, ZEEKR launched its self-developed gold brick battery, GAC launched the Inpai P58 microcrystalline super battery, and Changan also released the Golden Bell Jar battery series, planning to form a self-developed battery production capacity of no less than 150GWh by 2030.
In addition, the background is that the role of power battery manufacturers has changed from being in short supply to being unmarketable in just one year. For survival reasons, it is possible to reduce the price of the "bloody battle". It's just that everyone understands that this is a matter of "injuring 1,000 enemies and injuring 800 yourself."
In addition to power battery companies, since 2024, many car companies have also felt the pressure of survival in advance and have launched price reduction measures. On January 11, Li Auto launched a preferential campaign for the 2023 model, with a maximum reduction of 38,000.
On January 12, Tesla China officially announced the price reduction of the Model 3 and Model Y. BYD's official Song Pro DM-i Champion Edition has also launched a limited-time offer.
In addition, Leapmotor, SAIC Volkswagen (2024 ID.4 X), Zeekrypton 001, and Chery (Little Ant) have also announced price reduction promotions. The price reduction of car companies, in addition to the normal preferential promotion, fully shows that under the cruel competition, the cost reduction of power batteries has become a general trend.
In fact, since the beginning of last year, there has already been a phenomenon of lithium battery companies generally cutting prices and selling goods. Especially at the end of the year, many companies sell goods to increase revenue, so as to make the annual financial statements more "good-looking".
Moreover, since last year, the entire lithium battery industry chain has fully entered the era of overcapacity. On the one hand, there is operating pressure, and on the other hand, there is an overall surplus in the industry, and the pressure on lithium battery companies in 2024 can be imagined.
Of course, one wins, one loses. If the upstream power battery industry chain is in a difficult situation, downstream OEMs will not be able to avoid the trend of this era.
Under the "cold winter" cycle, no one is immune. 2024 will be the year when the market will continue to diverge, and it will also be the first year of the "battle for survival".
Write at the end:
After the cost of batteries is reduced, does it mean that new energy vehicles can be "fractured"? In fact, it is not necessarily, battery is indeed one of the main costs, but it is not the only cost factor. When producing a car, there are other factors to consider, including the battery case, motor, electronic controller, charging equipment, and more. In addition, the selling price must also take into account other costs including operating costs, R&D expenses, and marketing expenses. So the drop may not be as big as we thought, but it's just as good as it gets.