Electric Vehicle Battery Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Every organization and its procurement team look forward to negotiating the best deal while procuring a set of products or subscribing to services. Rate benchmarking involves price/cost comparison of more than one set of products/services to analyze the most efficient combination that can potentially help the procurement team in getting the optimum rate.

The geographical location, supply chain complexities, and scale of business play a vital factor in analyzing the rate benchmarking of the electric vehicle battery category. Battery prices differ across regions. On average, China has the lowest prices for batteries, while the rest of the Asia Pacific region has the highest. This price gap is because China manufactures around 65% of battery cells and almost 80% of cathodes.

According to the Economic Times, in 2023, regional battery prices will be a crucial factor in the future as countries and companies aim to establish the battery supply chain locally. The cost of battery packs is the lowest in China, at USD 126 per kWh, while it is 11% and 20% more expensive in the U.S. and Europe respectively. The higher prices in the U.S. and Europe are due to their relatively immature markets, higher production costs, lower volumes, a diverse range of applications, and battery imports.

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Labor cost is one of the key components of the total incurred costs while offering a product or service. Therefore, an organization must decide on whether the focus category should be retained in-house or outsourced if the organization is providing its products or services at competitive prices. If the organization decides in favor of outsourcing, it must understand the difference in the salary structures of suppliers before selecting a supplier and formulating a negotiation strategy.

According to our research, battery engineers at Tesla and LG Energy Solution receive a 10 - 12% higher base salary compared to the salary received by battery engineers working in companies such as Panasonic and Toshiba Corporation. However, the year-on-year increment rate in all these companies majorly depends on the Key Result Areas (KRAs).

Organizations may find it cumbersome to track all the latest developments in their supplier landscape continuously. Outsourcing the activities related to gathering intelligence allows organizations to focus on their core offerings. At this juncture, our newsletter service can help organizations stay updated with the latest developments and innovations and subsequently assist in preventing disruptions in the supply chain. We have identified the following developments within the electric vehicle battery category over the last two years:

• In November 2023, Stellantis announced a Memorandum Of Understanding (MoU) agreement with CATL. As part of the deal, the latter would be responsible for supplying LFP battery cells and modules to Stellantis’s EVs. The agreement states that the two involved companies would develop a technology roadmap to support Stellantis’s electrification strategy by strengthening the battery value chain.

• In August 2023, CATL announced the launch of its LFP battery, named Shenxing. This superfast charging 4C battery can deliver a 400 km range of driving within 10 minutes of charging. On a single full charge, it can cover up to 700 km in range. The battery consists of a cathode using “super-electronic network technology” and an LFP cathode material which has been “fully nano-crystallized”. The main aim of this EV battery, Shenxing, is to create a network that eases the extraction of lithium ions and rapidly responds to charging signals.

• In April 2023, Tesla Power announced its partnership with Indian Oil for distribution of battery in India. Through this cooperation, Tesla Power USA batteries will be able to sell and service their batteries at more than 36,000 IOCL gas stations in India. This would offer customers convenience and availability when buying and maintaining car batteries. Both lead-acid batteries and Lithium batteries will be offered by Tesla and the company will cater to all automotive and EV segments.