Electric Vehicle Battery Procurement Intelligence
In this electric vehicle battery procurement intelligence report, we have estimated the key cost components associated with battery production. The key cost components include raw materials, materials, energy, labor, packaging, depreciation, facilities and utilities, insurance and marketing. Raw materials can include a variety of chemicals such as lithium, nickel, cobalt, and manganese for cathode, graphite for anode, and polyolefin materials for separators. The components located outside of the cathode constitute almost 49% of the cost of a cell. As people move towards sustainable transportation, the cost of EV batteries has become a crucial factor to consider. Various factors can impact the total cost; however, the chemical composition of the battery is the most important factor. For instance, the cost of lithium iron phosphate (LFP) batteries, which are less energy-density batteries, have a lower average price of USD 98.5 per kWh compared to NMC and NCA batteries at USD 112 – 120 kWh range.
According to the IEA EV 2023 report, the impact of rising battery material costs varied across different battery types in 2022. The most significant increase was seen in LFP batteries, which rose by over 25%. Meanwhile, Nickel Manganese Cobalt (NMC) batteries saw an increase of less than 15% in 2022. LFP batteries do not contain nickel or cobalt, which are more expensive than iron and phosphorus. Therefore, the price of lithium has a relatively greater effect on the final cost of LFP batteries. In 2022, prices of lithium increased at a higher rate compared to nickel and cobalt. As a result, prices of LFP batteries rose steadily more than NMC batteries.
Order your copy of the Electric Vehicle Battery category procurement intelligence report 2023-2030, published by Grand View Research, to get more details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis
Operational Capabilities - Electric Vehicle Battery
- Years in Service - 22%
- Geographic Service Provisions - 20%
- Employee Strength - 18%
- Revenue - 15%
- Industries Served - 10%
- Certifications - 8%
- Key Clients - 7%
Functional Capabilities - Electric Vehicle Battery
- By Battery Type (Lithium Ion/ Lead Acid/ Ni Metal Hydride) - 50%
- Battery Capacity (kWh)
- High (>100 kWh) - 9%
- Medium (51 to 100 kWh) - 8%
- Low (0 to 50 kWh) - 8%
- By Propulsion
- Battery Electric Vehicle (BEV) - 13%
- Plug-in Hybrid Electric Vehicle (PHEV) - 12%
Rate Benchmarking
The geographical location, supply chain complexities, and scale of business play a vital factor in analyzing the rate benchmarking of the electric vehicle battery category. Battery prices differ across regions. On average, China has the lowest prices for batteries, while the rest of the Asia Pacific region has the highest. This price gap is because China manufactures around 65% of battery cells and almost 80% of cathodes.
According to the Economic Times, in 2023, regional battery prices will be a crucial factor in the future as countries and companies aim to establish the battery supply chain locally. The cost of battery packs is the lowest in China, at USD 126 per kWh, while it is 11% and 20% more expensive in the U.S. and Europe respectively. The higher prices in the U.S. and Europe are due to their relatively immature markets, higher production costs, lower volumes, a diverse range of applications, and battery imports.
Supplier Newsletter
- In November 2023, Stellantis announced a Memorandum Of Understanding (MoU) agreement with CATL. As part of the deal, the latter would be responsible for supplying LFP battery cells and modules to Stellantis’s EVs. The agreement states that the two involved companies would develop a technology roadmap to support Stellantis’s electrification strategy by strengthening the battery value chain.
- In August 2023, CATL announced the launch of its LFP battery, named Shenxing. This superfast charging 4C battery can deliver a 400 km range of driving within 10 minutes of charging. On a single full charge, it can cover up to 700 km in range. The battery consists of a cathode using “super-electronic network technology” and an LFP cathode material which has been “fully nano-crystallized”. The main aim of this EV battery, Shenxing, is to create a network that eases the extraction of lithium ions and rapidly responds to charging signals.
- In April 2023, Tesla Power announced its partnership with Indian Oil for distribution of battery in India. Through this cooperation, Tesla Power USA batteries will be able to sell and service their batteries at more than 36,000 IOCL gas stations in India. This would offer customers convenience and availability when buying and maintaining car batteries. Both lead-acid batteries and Lithium batteries will be offered by Tesla and the company will cater to all automotive and EV segments.
List of Key Suppliers
- Contemporary Amperex Technology Co., Ltd. (CATL)
- LG Energy Solution
- BYD Company Ltd.
- Panasonic Corporation
- Samsung SDI Co., Ltd.
- SK Innovation Co., Ltd.
- Toshiba Corporation
- EnerSys, Inc.
- Mitsubishi Corporation
- Hitachi, Ltd.
- Tesla, Inc.
- Gotion High Tech Co Ltd (Guoxuan High-Tech)
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Electric Vehicle Battery Procurement Intelligence Report Scope
- Electric Vehicle Battery Category Growth Rate : CAGR of 21.1% from 2023 to 2030
- Pricing Growth Outlook : 15% - 20% (Annually)
- Pricing Models : Volume-based, contract-based
- Supplier Selection Scope : Cost and pricing, past engagements, productivity, geographical presence
- Supplier Selection Criteria : Production capacity, type of battery, battery capacity, propulsion, operational capabilities, quality measures, certifications, data privacy regulations, and others
- Report Coverage : Revenue forecast, supplier ranking, supplier positioning matrix, emerging technology, pricing models, cost structure, competitive landscape, growth factors, trends, engagement, and operating model
Brief about Pipeline by Grand View Research:
A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain, which helps in efficient procurement decisions.
Our services include (not limited to):
- Market Intelligence involving – market size and forecast, growth factors, and driving trends
- Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships
- Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing
- Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions
