Significantly Lower Battery Prices Also a Tailwind for Future Strategies

Genesis Opening a New Era
Economies of Scale Lead to Price Drops
Car Prices Accounted for 30-40% Several Years Ago
Recently Dropped to Around 25%

SK Innovation's NCM9 battery exhibited at the InterBattery event held last June. This battery, used in Ford's electric pickup trucks, contains 90% nickel.

[Asia Economy Reporter Choi Dae-yeol] BMW's electric vehicles iX and i4, scheduled for release within the year, will be equipped with Samsung SDI's next-generation lithium battery 'Gen5'. Compared to existing batteries, it features a 20% reduction in production cost for the same capacity. The cost was lowered by increasing the nickel content, a key material, and reducing the use of expensive cobalt.

One of the reasons why 120,000 people rushed to pre-order Ford's electric pickup truck F-150 Lightning, set to launch next year, is its price competitiveness. The base model costs $39,974, approximately 46 million KRW. Electric pickup trucks require about 100 kWh batteries, making their battery prices inevitably higher than sedans that use around 60-70 kWh. SK Innovation's battery supply played a significant role in enabling Ford to lower the price this much.

SK is also focusing on technology development to improve battery performance and safety while lowering costs. Since batteries account for a significant portion of electric vehicle prices, battery price reduction is considered a prerequisite for expanding electric vehicle adoption. Hyundai Motor Group's strategy to dominate the global electric vehicle market, led by Genesis, also requires support from battery price and technology.

Recently, the fact that battery production is achieving economies of scale and prices are falling is a positive factor for Hyundai Motor Group. Just a few years ago, batteries accounted for 30-40% of electric vehicle prices, but the industry now estimates it to be around 25%.

Employees are examining batteries at the Ford Battery Research Center in Michigan, USA.

Lithium-ion Battery Export Prices Down 20% in Less Than Two Years
Battery Prices Down, Performance Up... A Prerequisite for Expanding Electric Vehicle Adoption

Although specific prices are not disclosed by companies, the downward price trend is clear when estimated from export unit prices. According to an analysis of export-import statistics compiled by the Korea International Trade Association, the average export price of lithium-ion batteries mainly used for electric vehicles was $31.8 per kilogram this year (January to July). Considering that it exceeded $39 in 2019, it has dropped about 20% in less than two years. In 2013, when prices were at their peak, it was $46-47, about two-thirds of that at the time.

This figure is based solely on weight without considering battery performance, so it does not precisely reflect the cost burden on electric vehicle manufacturers, but it shows that battery prices are steadily falling. Samsung SDI recently disclosed in its semi-annual report that the average price of all models, including small batteries, is 2,457 KRW per cell. This is about 8% lower than last year and about 15% lower than two years ago.

Chinese and Japanese battery companies are also actively working to reduce prices. Chinese battery companies have mainly used lithium iron phosphate (LFP), which is cheaper though somewhat lower in performance, but CATL recently officially announced plans to develop batteries using sodium instead of lithium.

This content was produced with the assistance of AI translation services.