Costs

Section Summary - Cost Reduction Is Now Priority #1 Throughout The Battery Value Chain The situation for battery manufacturing costs can currently be characterised by three challenges that producers are facing along the value chain:

KEY TAKEAWAYS

Battery manufacturers and automakers are prioritising cost reduction as the main survival mechanism in a market with tight margins and intense price competition.

Battery prices in China are now low enough to drive profound demand, but only the lowest-cost producers will survive.

New manufacturers in Europe and North America face several barriers in basic manufacturing efficiency and quality. Given this, the Western battery industry continues to consist of the Asian incumbents.

OVERCAPACITY across the entire supply chain, resulting in pullback of investments. COST REDUCTION efforts because of shrinking margins and intensifying competition. DIVERSIFICATION into new markets, driven by rising protectionism and domestic competition.

Source: Content & analysis provided courtesy of CRU Group Distinguished Partner). For more information, visit https://www.crugroup.com.

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