Costs

Materials Remain the Single Largest Cost Component of Producing Cells & Electrode Materials SHARE OF LEVELISED COST OF PRODUCTION FOR BATTERY CELLS, ANODES AND CATHODES IN CHINA, 2024

Source: IEA. See source link for full footnote.

The basic cost structure for battery cells and components is made up of input materials, capex and maintenance (spread across lifetime of depreciation of equipment), energy, and labour.

Alongside these is the concept of yield (efficiency or quality rate), which if low can drive up all costs.

These all vary by region and manufacturer and throughout the ramp-up timeline of a production facility.

The price of input materials is the single largest contributor to overall costs, especially so for cathode materials such as LFP. This is why tariffs on input materials from overseas are a significant issue for localisation in regions such as the US.

However, the price of materials is mainly a function of market conditions, and those without the means to secure cheaper feedstock have opted to focus on other cost factors such as reducing labour through automation or improving yields through technical process innovation.

Extracted from the PDF; charts and images may read imperfectly.