Battery Margins Big! How Big!

The latest news is that CATL is putting LFP battery cells on the factory floor for 70 dollars a kilowatt hour. This is expected to drop to 56 dollars a kilowatt hour by summer.

Today, you can buy fully packaged batteries at the outstanding price of 1000 dollars a kilowatt hour. I know there is thermal engineering and packaging along with marketing and other overhead, but 1000 seems excessive. I would think at these numbers every single available investment dollar would be flowing into battery manufacturing.

I might add that Sodium Ion batteries should be on the market in 2024 and they have several advantages over LFP. The one disadvantage is the weight to energy is a little worse than LFP. Still for solar storage, lawn equipment, marine and RV house batteries they will be a much better choice than LFP.

I would suspect that LFP factories will rule for a few years, but that before the end of the decade we will see many domestic sodium ion plants putting out batteries for the second tier markets. The margins are better than a gold mine.



How cheap would batteries have to get to make EVs acceptable in the Red States?


U.S. battery storage capacity has been growing since 2021 and could increase by 89% by the end of 2024 if developers bring all of the energy storage systems they have planned on line by their intended commercial operation dates. Developers currently plan to expand U.S. battery capacity to more than 30 gigawatts (GW) by the end of 2024, a capacity that would exceed those of petroleum liquids, geothermal, wood and wood waste, or landfill gas.

Two states with rapidly growing wind and solar generating fleets account for the bulk of the capacity additions. California has the most installed battery storage capacity of any state, with 7.3 GW, followed by Texas with 3.2 GW. The rapid growth of variable solar and wind capacity in states such as California and Texas supports growth in battery storage, which works by storing excess power in periods of low electricity demand and releasing power when electricity demand is high. The remaining states have a total of around of 3.5 GW of installed battery storage capacity.

Planned and currently operational U.S. utility-scale battery capacity totaled around 16 GW at the end of 2023. Developers plan to add another 15 GW in 2024 and around 9 GW in 2025, according to our latest Preliminary Monthly Electric Generator Inventory.


U.S. battery storage capacity expected to nearly double in 2024 - U.S. Energy Information Administration (EIA).


For most of the past decade, $100 per kilowatt-hour (at the battery pack level, not the slightly lower cell cost) was thought to be the Holy Grail. In November 2021, battery cost for the industry overall was calculated at $132/kWh by Bloomberg New Energy Finance.

The Captain