CATL, one of the world’s biggest battery producers and a major supplier to Tesla announced that it will reduce the cost of its LFP batteries by 50% (!) in 2024.
This means the price of an average 60 kWh battery pack will have dropped from $US6,776.00 to just $3,388.00 in just 12 months, saving EV manufacturers over $3,000 per vehicle. World's largest EV battery maker set to cut costs in half by mid 2024
This may be signaling an impending price war in electric vehicle batteries.
In a perhaps related development, Tesla is buying CATL equipment for LFP battery production in Nevada in a location adjacent to where Panasonic is expanding facilities to also make more batteries with Tesla. While initially for its storage business, it could easily be expanded to make batteries for Tesla EVs. This would help Tesla qualify for US domestic EV incentives in the near to mid future while also learning how to make super cheap battery cells.
As the OEMs curtail their EV development on the assumption of declining EV demand and shift their focus to hybrids, the cost of the most expensive element of EVs is about to be cut in half, coincident with Tesla preparing for its entry into the low-end of the car market. We are reaching a point where the major western legacy automakers are too far behind in electric vehicles to survive without government protection from imports and a bail out.