The price of power batteries is declining, and the price reduction tide is coming

Text|Zinc Finance Lu Shiming.

Edit|Gale.

As one of the core components of new energy vehicles, battery cost has always been the biggest expense of car companies, and it largely determines the operating profit of a new energy vehicle company.

In the early years, because of the high cost of upstream materials, the price of the terminal car companies was increased layer by layer, which led to high cost pressure and bitterness of terminal car companies. However, since last year, with the gradual extinguishment of the capital fire, the battery raw materials have begun to be substantial, and the profit margins of car companies have been enhanced, providing a lot of support for the "first war".

Now, as the cost of batteries falls to the next level, the electric car market may usher in a more turbulent wave of price cuts, and the battle between car companies will become more exciting. The industry knockout race is accelerating again, which is undoubtedly a positive for consumers.

Battery cost roller coaster Judging from the ** report, after entering 2024, CATL will continue to promote 173AH VDA specification lithium iron phosphate cells to car companies, with 2 as standard2C rate fast charging, take the route of large single products.

For this product, industry insiders said: "In the middle of 24 years, several car companies will switch to this product, the battery cell is quite low, the amount of increase is not increased, and the target is the pure electric market of 100,000-200,000 yuan." ”

It is understood that the product launched by CATL will not exceed 04 yuan Wh, and the entire power battery industry is planning to push the battery ** forward 0$3 wh.

0.What kind of concept is 3 yuan wh? In other words, the cost of one kilowatt-hour of electricity is almost 300 yuan, so the cost of 100 kilowatt-hours is about 30,000 yuan. If you add in the heat dissipation, guard plate and other accessories, the cost of a 100-degree battery pack will basically be within 40,000 yuan.

In contrast, just a year ago, the ** of lithium iron phosphate was maintained at about 09 yuan Wh, a 100-degree battery pack costs about 90,000 yuan.

You must know that the current 100-degree battery pack has a battery life of about 500-700 kilometers, and the pure electric models with such endurance performance are generally priced at more than 200,000 yuan. If the previous battery accounted for 40% of the cost of the vehicle, the cost of the next 500-700 kilometers will come to about 100,000.

For a long time, there are two main factors affecting the battery, one is technological innovation, and the other is the cost of raw materials. Regarding the former, there has been no substantial breakthrough in battery technology for many years. Then the answer is obvious, the fundamental reason for the battery *** is the significant decline in the cost of its raw materials.

The core of electric vehicles is the power battery, and the core of the power battery is lithium.

In the past few years, the new energy vehicle industry has entered an explosive stage, the lithium battery market has grown rapidly, the demand for lithium carbonate has increased significantly, and the capital has started to speculate from the source of the industry, resulting in soaring lithium prices, and the price of lithium has been soaring, and it has been significantly higher in the short term.

After entering 2023, due to the market surplus and slowdown in market growth, lithium prices will turn around and enter the first stage.

According to the data of domestic professional institutions Shanghai Nonferrous Metals Network and Xinchun Lithium Battery, on the last trading day of 2023, the domestic median spot price of battery-grade lithium carbonate has fallen to 1010,000 tons, the lowest ** fell below 100,000 tons. 52Compared with 250,000 tons, battery-grade lithium carbonate will drop by 80% in 202367%。

The price of lithium has led to a decline in the cost of lithium batteries, which is good news for battery manufacturers such as CATL, and a huge benefit for downstream car companies.

In 2022, when the price of lithium is high, the high cost of batteries makes car companies complain.

At the 2022 World Power Battery Conference, Zeng Qinghong, chairman of GAC Group, publicly said: "At present, all new energy OEMs except Tesla are losing money, and the cost of power batteries has accounted for 40%-60% of the cost of the whole vehicle, and it is still increasing. ”

With the sharp decline in lithium carbonate** in 2023, car companies are no longer shouting about pressure. In addition, car companies have a certain amount of room for operation, such as being able to maintain market competitiveness by drastically reducing ** in the first war.

However, this is where people feel "disconnected".

In the past year, many car companies have been involved in the war, and the tram has indeed declined significantly.

In the case of Tesla, the price of its main models will continue to be lowered in 2023, with a maximum reduction of 60,000 yuan. Including BYD's Han EV, the 605km premium model will need about 240,000 units at the beginning of 2023, but by the end of 2023, it will be about 210,000 units. In addition to the above two, the decline in the products of the new power camp is even more exaggerated.

However, at the same time as the price cut, car companies are also constantly pushing the best grades, such as Ideal Banner's MEGA, NIO's ET9...There are more and more trains that cost more than 500,000 yuan.

I can deeply feel that unlike the period of high battery costs, car companies can also blame the high price on the upstream of the industry, and now car companies have lost this rhetoric, but it does not seem to prevent them from piling up products, and the current premium direction of car companies is the so-called "intelligent".

At present, the vehicle-machine system and autonomous driving have become the core elements of the premium of car companies. Indeed, with the development of intelligent technology, intelligence will become one of the core competitiveness of vehicle manufacturing.

The problem is that at present, almost all car companies on the market are promoting how leading their intelligent technology is, but in the actual application of consumers, they have not shown enough amazing side. Among them, some "intelligent" is suspected of false propaganda, and some "intelligent" may have a certain technical content, but it does not hit the pain points of consumers.

Asking consumers to pay for an ethereal, impractical and inapplicable "gimmick" at a high price will only bring negative results to car companies.

The market needs low-cost cars, instead of blindly using "intelligence" to push up prices and strive for higher gross profits, it is better to lay out a new product line to occupy the low-end pure electric market with strong demand and increase market share.

At present, the field of pure electric vehicles below 100,000 is mainly based on mini cars, such as Wuling Hongguang MINIEV, and Wuling Binguo and other short-range models, from the sales point of view, the sales of these models seem to be eye-catching, but compared with Nissan Sylphy, Volkswagen Lavida these 100,000 or so fuel vehicle sales, there is still a big gap.

The reason is not complicated, there are obvious shortcomings in the performance of pure electric vehicles within 100,000 yuan, and the cruising range of most vehicles is only two or three hundred kilometers, and the maximum speed is about 100 kilometers per hour. On the other hand, a fuel car with a speed of less than 100,000 yuan can easily achieve a range of 500km and a top speed of more than 150. Because of this, consumers have always been hesitant and resistant to pure electric vehicle models within 100,000 yuan, so they have no choice but to choose fuel vehicles at the same price.

These facts also show that consumers have a strong demand for products within 100,000 yuan, and there are too few cost-effective pure electric models within 100,000 yuan.

Previously, because of the high cost and low profit of pure electric models within 100,000 yuan, which tested the cost control ability of car manufacturers, most car factories were reluctant to produce pure electric vehicles below 100,000 yuan. But now that the cost of batteries has dropped sharply, in the face of the low-end market with strong demand, car companies have every reason to incorporate the pure electric vehicle market within 100,000 into the product line and develop new products so that more consumers can afford electric vehicles.

Zinc Finance believes that such a path may be more suitable for the new power car companies in a worrying situation.

Through the mature ** chain, it is not difficult for new car companies to create a cost-effective A-class pure electric car. If we can rely on such a first-class product strength, I believe that it will soon be recognized by consumers under the huge market demand.

Of course, the business model of small profits and quick turnover may leave consumers with a low-end brand image, which is not conducive to the impact on the high-end market in the future, but in the current market environment, it is obviously much more important for new car companies to "survive" than to focus on the future.

2023 is the year when new energy vehicles start the knockout competition, and WM has unfortunately become the first player to go down.

In the blink of an eye to 2024, with the sharp decline in battery costs and the slowdown in the growth rate of new energy vehicle sales, the entire industry will only become more and more involuted.