Price trend of Lithium battery and raw material price forecast in 2018

Price trend of Lithium battery and raw material price forecast in 2018

Technological advancement and batteries price drop, these two important factors for new energy automobile industry developing.  It estimated battery system price would continue to drop around 1.3 yuan/Wh in 2018, which decline about 10-15%. Affected by raw materials price, battery cost will keep almost same despite advance technologic, improve efficiency and big scale effect. Lower price will further squeeze gross profit for battery companies. It estimates that overall gross profit of battery industry will drop from 36% to 30% this year.

According to the splitting of the cost of the power battery, the total cost of the four main materials - the positive electrode material, the negative electrode material, the separator and the electrolyte - does not exceed 60%. Among them, the cost of the four main materials of lithium iron phosphate batteries accounts for about 50%, and the cost of the four main materials of ternary batteries accounts for about 60%. The highest cost ratio is cathode material and other costs (including structural parts, labor costs, etc., mainly non-scale effect costs). The proportion of positive electrode of lithium -iron phosphate battery is about 25%, and the cost of ternary battery cathode material is especially high, close to 40%.

Figure: lithium iron phosphate battery cost split

The price of key battery materials has risen, and battery manufacturers are under pressure. Among the four main materials, the price of electrolyte has dropped sharply, and the price of separator has gradually declined. Although the price of the negative electrode has increased, the impact on the total cost of the battery is less than 1%. The price of the positive electrode material, which has the greatest impact on cost, is affected by fluctuations in the price of raw materials, cobalt and lithium, and the price is difficult to loosen. Leading battery companies with a certain scale rely on market advantages to cooperate with upstream battery materials and raw material manufacturers to master certain bargaining power, but this part of the price contradiction will be concentrated to small and medium battery companies.

The reduction in cell cost can come from two main parts: increasing energy density and increasing battery standardization. Increased energy density can reduce cell cost and group price. In addition to reducing the total cost per unit cell, the increase in energy density also increases the efficiency of cell stacking, further reducing the weight and cost of the battery pack. Increasing the standardization of batteries enables battery companies to reduce manufacturing costs through economies of scale.

In general, price cuts pressure for mid-stream enterprises will greater next year. As key raw materials price continue to rise and price cuts range is small, there is big pressure for small and medium-sized enterprises. Leading enterprises with scale advantages have strong negotiation power and pass cost pressures to small and medium-sized battery companies. Meanwhile, energy density requirements increasing and car companies will choose leading battery companies with better technology and produce capacity.

The page contains the contents of the machine translation.