The world’s largest EV battery maker wants even more. China’s CATL told its suppliers it would provide funding as it looks to gain market share and overcome an intensifying price war in the EV battery space.
CATL ensures supplier funding as the price war heats up
CATL is already dominating the global EV battery market, but it has no plans of slowing down. The battery giant told its suppliers it would provide them with funding.
The decision comes as CATL looks to get new battery tech out quicker. A letter sent to its suppliers this month, viewed by Reuters, said the company would support R&D (Research and Development) with advance funding to accelerate new battery innovations.
CATL confirmed it had sent the letter, dated December 2024, but didn’t provide any other info. The supplier note also said it would support new EV battery materials to gain an edge in an increasingly crowded market.
Although everyone is talking about the EV price war, the global battery market is facing even more pressure. According to BloombergNEF’s annual battery price survey, the cost of EV battery packs fell to $115 per kWh in 2024. This year marks the steepest drop in battery prices since 2017.
The plummeting battery prices is due to higher cell production, falling material costs, and cheaper LFP batteries rolling out.
According to the study, average battery prices are expected to slip below $100 per kWh as soon as 2026, which is viewed as the “price parity” point with ICE vehicles. By 2030, that number could reach as low as $69 per kWh.
“China alone is expected to produce enough battery cells to meet 92% of total global demand of 1.2 terawatt-hours for EV and stationary storage segments in 2024,” the report claimed. Although it’s helping drive lower electric car prices, the higher output has also “exerted downward pressure on battery prices.”
Electrek’s Take
CATL already has a commanding lead in the global EV battery market, but with advanced supplier funding, it aims for an even bigger share.
Despite an influx of new companies, CATL extended its lead this year. According to SNE Research, CATL accounted for 36.8% of the global EV battery market through the first ten months of 2024. That’s up from 35.9% in October 2023.
However, BYD, the second-largest battery maker with a 16.8% market share, is also aggressively seeking to increase its market share.
BYD’s next-gen Blade battery is due out next year. According to reports, BYD aims to cut costs by 15% compared to its current tech.
CATL has introduced several new batteries over the past few years, but with its new Blade unit dropping next year, BYD could close the gap. Meanwhile, the global battery leader is looking to counter by backing its suppliers.