According to a recent report released by Goldman Sachs, the global average battery price has dropped from $153/kWh in 2022 to $149/kWh in 2023. Goldman Sachs predicts that by the end of this year, the price is expected to fall to $111/kWh, and will further fall to $80/kWh by 2026, a 50 per cent drop from 2023.
Goldman Sachs analysts believe that the primary reason is technological advancement, with some newly launched battery products offering higher energy density at lower costs. Large cell and battery pack technologies have reduced or even eliminated battery modules, such as Tesla, which has begun producing large 4680 cells.
The second reason is because the price of battery metals, including lithium and cobalt, continues to fall. Battery metal costs account for nearly 60 per cent of battery costs. According to data released by Goldman Sachs, rising raw material prices had caused electric vehicle battery costs to soar in 2022. Now, as battery metal prices continue to fall, it is expected that by 2030, about 40 per cent of the decline in battery costs will come from the decline in battery metal prices.
Goldman Sachs pointed out in the report, the current global mainstream power battery is LFP (lithium iron phosphate) batteries and ternary lithium batteries (nickel cobalt manganese batteries and nickel cobalt aluminium batteries). Lithium ternary batteries occupy about 60% of the market share, LFP batteries occupy 35%-40% of the market share. Goldman Sachs analysts have raised their 2025 market share forecast for LFP batteries to 45%, up from 41% previously.
Cui Dongshu, secretary-general of the China Passenger Vehicle Association, said this month that from January to October this year, due to the high price of nickel and cobalt, ternary lithium batteries and LFP batteries market showed differential growth. With the growth of long range products, there is still a market for ternary batteries, while falling prices are driving the overall growth in LFP battery market share.
EV giant BYD has just confirmed that it will launch a new generation of blade batteries in 2025, aiming to reduce EV production costs and accelerate the popularity of new energy vehicles. According to Electrek, the new generation of BYD batteries are smaller, safer and more efficient, and will significantly improve EV range and performance.
Cao Shuang, BYD’s general manager for Central Asia, said the new batteries have a long life and are suitable for a variety of scenarios, including energy storage. The new battery, which uses lithium iron phosphate (LFP) material, costs less than traditional lithium-ion batteries, enabling BYD to launch more low-priced, high-performance EV models. For example, BYD’s Seagull EV, which is equipped with a blade battery and priced at RMB 69,800, has a range of 405 kilometres.
If you are interested in LFP battery, please pay close attention to First Phosphate (CSE: PHOS) (FSE: KD0). This is the only publicly listed company that is fully dedicated to extracting and purifying phosphate for the production of cathode active material for the Lithium Iron Phosphate (“LFP”) battery industry. LFP batteries operate similarly to other lithium-ion batteries. They have the advantage of being non-toxic, having superior fire safety, longer cycle life and lower cost. The company is the Building Block for a North American LFP Battery Ecosystem, the company holds a total of 1,500+ sq. km of royalty-free land claims in the Saguenay-Lac-St-Jean Region of Quebec, Canada consisting of rare anorthosite igneous phosphate rock that generally yields high purity phosphate material devoid high concentrations of harmful elements.
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