my country's new energy vehicle market is currently entering a new period of expansion, and lithium-ion batteries, the core component of these vehicles, are at the forefront of this growth, yet still face numerous challenges. As an important energy storage battery, the price of lithium-ion batteries fluctuates with market development. A lithium-ion battery consists of a casing, positive electrode, negative electrode, electrolyte, and separator, and utilizes various chemical components. While lithium-ion batteries are a simple product, their relatively high price is primarily due to low production volume. This low production volume makes it difficult to amortize fixed costs and also hinders technological advancements through mass production to further reduce the cost per unit of electricity.
In 2018, the existing subsidy standards were reduced by 20%. Among them, subsidies for passenger cars and special-purpose vehicles were reduced by about 20%, and subsidies for buses were reduced by 30%-50%. The local matching subsidy ratio decreased from 1:1 to 1:0.5. New energy vehicle companies, which heavily relied on government subsidies for their development, were severely impacted and demanded that power lithium-ion battery companies significantly reduce prices.
The main factor influencing the price of lithium-ion batteries is the cost of materials. Among these materials, very few are actually high-tech. Ignoring the positive electrode and focusing on the negative electrode, which is made of graphite, there's relatively little technological content involved. Its high price is due to low production volume; once production increases, there will be a surplus of negative electrodes in no time. The casing and copper foil also lack technological content in the long run, and their prices are expected to decline steadily.
As the performance advantages of lithium-ion batteries become more apparent, the market size has gradually expanded. The increase in demand has directly led to an expansion in production and a decrease in manufacturing costs, which in turn stimulates further increases in market demand. In this way, the lithium-ion battery industry has embarked on a virtuous cycle of development.
Reasons for the decline in lithium-ion battery prices
1. A typical lithium-ion battery consists of a casing, positive electrode, negative electrode, electrolyte, and separator. It uses some chemical components. The main reason why it is relatively expensive is that the production volume is too small. The small production volume makes it difficult to spread the fixed costs, and at the same time, it is impossible to improve the technology through mass production to further reduce the cost per unit of electricity.
2. The second factor affecting lithium-ion battery prices is material cost. There's actually very little high-tech involved in the materials. The negative electrode is made of graphite, which has relatively little technological content; its high price is due to low production volume. If production increases, there will be a surplus of negative electrodes in no time. The casing and copper foil also lack technological content in the long run, and their prices are expected to decline steadily.
3. Cell quality is also a significant factor affecting the price of lithium-ion batteries of the same capacity. Different lithium-ion cell materials are a major contributor to price differences; different sourcing channels also affect prices. Some lithium-ion batteries use imported cells, while others use domestically produced ones; there are also distinctions in cell quality, such as Grade A, Grade B, and Grade C; and some unscrupulous manufacturers even use second-hand or salvaged cells, which can lead to even greater price differences.
New energy vehicles are entering the battery replacement phase, and the replaced lithium-ion batteries can be used in electric bicycles. According to lithium-ion battery companies, there are no problems using lithium-ion batteries from new energy electric vehicles in electric bicycles, and the price of these lithium-ion batteries will far exceed people's expectations.
In 2018, lithium-ion battery technology accounted for 95% of the global battery market share, and this dominant position is expected to continue for the next decade. However, with continuous industry upgrades, increasingly stringent technical requirements from downstream automakers, and the arrival of the subsidy-free era, the domestic battery industry has undergone a dramatic transformation, shifting from capacity expansion to a reshuffling. Currently, the power lithium battery industry has entered a reshuffling phase.
