Actual news story with sources in the South China Morning Post.[2]
"Capacity utilisation is a major headache for producers in mainland China. The industry produced 747 gigawatt-hours (GWh) of battery power last year, while only 387GWh was installed into products, according to the China Automotive Battery Innovation Alliance. Prices of Chinese battery cells could further decline by 10 to 15 per cent in 2024, dragged down by slowing demand in China’s EV market, according to a report by Haitong International this month."
Somewhere, there is a really big pile of unsold batteries. Fortunately they are lithium-iron-phosphate, which doesn't go into thermal runaway and catch fire.
That pile of batteries isn't showing up on marketplaces like Alibaba. There, the cost of 1 kWh of cells (not even yet assembled into batteries) is still $150+.
Makes me think someone might be claiming to produce far more cells/batteries than they really do.
China 'over production' in the new energy sector is the critical driver toward making the global shift away from fossil fuels. It can't be done without collapsing the cost the doing so. We can expect the same story unfold for batteries as we saw a decade ago with photovoltaics - an ultimate win on aggregate for humanity
In a few years you'll have the same people surprised when the Chinese dictator will shut down key energy exports like these either for Taiwan or some other land grab.
Cheap batteries are a world changing technology. This is missing key in making cheap electric cars which solves numerous environmental problems. It also has massive geopolitical implications: A world that runs much less on oil is a very different world.
The idea that this is overcapacity is nonsense. Currently a common electric car costs 40-50K USD, if a desirable electric car can be made at 15-20K USD it will unlock massive global demand.
It's overcapacity if producers are forced to sell at a loss to move inventory.
Typically, when you can buy a desirable electric car at 15-20K, that suggests a desirable electric car can be made for less than 15-20K, but with overcapacity, it could very well be that it cost 10K more to produce and the manufacturer is only selling it to turn a 25K-30K loss into a 10K loss.
Of course from a consumer perspective there can never be too much capacity and any drop in price is good, but the question is whether that is sustainable for producers, or whether we'll see factory closures down the line as the least profitable ones run out of money and have to shut down.
This overcapacity will quickly move into undercapacity. It's quite normal that during this rampup phase of EVs and batteries and factories for these are not in a steady state situation. There will be many ups and downs until EVs are the dominant or only car type being sold.
In a year or two there will be no point buying anything else than an EV. Lower price, better range, better performance, lower cost of ownership.
Lower price, better range, better performance, lower cost of ownership.
1) There is no EV car anywhere in the West that is even close to the cost of a comparably spec'd gas car. "A year or two" seems wildly optimistic. Try "decade or two".
2) Better range? Than what? Other electric cars? OK, great, but range isn't "$x km", but "$x km in $y time". Right now a gas car refuels in < 10 minutes, including time to pull off the interstate and back on.
Electric takes way longer, including that 'fast charge' being only to 80% typically.
You'd need 4x the range of a gas car, to even approach "the same range as gas"
3) Better performance? How? I've seen a lot of electric cars with underpowered electric motors. Every electric car is not a hot-rod.
4) Lower cost of ownership is not even remotely validated or proven yet. It's an assumption. It doesn't matter what the logic is, we have absolutely zero proof this is valid. The "most used parts", such as brakes and tires and such, actually wear faster because most EVs are far, far heavier than gas guzzlers.
And they DO damage the roads faster due to their added weight too, which means EVs are currently doing additional environmental damage, but heaping that environmental damage onto the shoulders of society.
And lets not even get started on battery recycling costs and environmental costs.
But my point is, that's a lot of assumptions for a really, really, really short timeframe. 1-2 years?
1) Well, Volkswagen have one planned for 2025, the ID 2all for about 25000 USD [1]. The BYD e2 costs around 15000 USD [2]. It's almost a physical fact that EVs are cheaper than gasoline cars to produce. Right now the prices are higher because of marketing (they can charge more as they have limited production capacity), they designed the cars as premium, suppliers have not yet optimized and standardized their EV components to the same degree as their combustion engine products and their volumes are lower.
2) Better range than gas cars was maybe a bit wrong, but what I meant was good enough to make any difference in practice. You can drive an EV long enough that your bladder or stomach says stop before the car. And with fast charging in less than 15 minutes, it's about the same it takes to take a quick break.
3) Well they can be faster in acceleration if needed, but that is of course not necessary. They are quieter, better torque etc.
4) They are heavier today because the batteries are over-dimensioned. In a couple of years, with the fast charging technology being introduced today, the battery could be made half the size. And the weight of SUVs where it adds no functionality versus a regular form factor car is just dumb payload. A regular form-factor EV car weighs same or less than a gasoline SUV.
5) Environmental costs? Yeah, as if gas cars have been good for the environment up until now. Try to recycle that gasoline. At least batteries can be recycled.
A lot of your points conflict. For example, you talk about range, then talk about 1/2ing the size of battery packs.
But:
1) When we see it, we'll see it. However, the '2all' @ 25kUSD is still 2x the price of the cheapest gas car in Canada (under $20k). But again, we'll see.
However, it is absolutely not a fact that EVs are cheaper to make. "Produce" perhaps, if you mean "assemble", although even this isn't a complete given. My point here is, the battery packs are currently very expensive, and are currently what is keeping price high. Nothing else.
And the thing we're reading about? Is a market aberration. Still, battery pricing is falling consistently, which is why I say 10 years.
2) This has been discussed over and over. If you're going to say "15 minutes to 80%", then for gas you must say "2 minutes to 100%". That is because you are discounting paying, getting on/off the road, and so on.
Your 15 minutes turns into at least 25 minutes, when adding in time to pay, find the charger, etc. Some days I drive 1600km, which is 4 refuels, which is 40 minutes for gas (and that's high), and for electric that's close to 2 hours for electric.
But the true problem here is, finding a fast charger along anywhere you may drive, and then.. it not being broken. It not being in use.
One day, we'll be there. Charging will drop to under 5 minutes. Charging stations will be everywhere, and so on. But that isn't in 2 years. At all.
For example, there are almost no non-tesla fast chargers anywhere in Canada. Trying to drive 3000km can be hard, and for Canada, that's not an unusual trip.
3) Fine, so you admit this is not an absolute. Fair enough.
4) Again with a 'couple of years'. This means 2 years. No. Things don't change that fast. This is hardware engineering, not code. You don't make clean and make install and done.
I'm not even sure what you mean with "over provisioning". You're not claiming that less range is somehow going to fix the weight?! Oh great, let's go to a measly 200km range, so an electric car now weights what a gas car does?
Put another way, if you take the form of a car, make it electric with 400km range, or gas engine instead, the electric will weight double. Go look at how heavy Teslas are with range. Literally, you're completely and totally wrong here, an EV weights 2x as much as a gas counterpart.
And beyond the 2x weight? As you drive a gas car, it gets lighter as the fuel is used. Not so with electric.
5) You're using a whataboutism to try to brush aside things. The point is, electric cars do pollute, and in different ways.
One of the thing that always erked me, is that we never seem to prepare. Recycling in North American is often "ship the thing 5000km over sea in a polluting boat, then have a 3rd world nation throw the recycling into a ditch and cover it". We can do better, but often do not.
Regarding range, sure in huge Canada or if driving 3000km in one day/night is something you do often, then maybe a gasoline car is better. But for the average person who is commuting, visiting friends and family in the region (< 200-500km), sightseeing, holidays and business trips then I think an EV has no problems with range today and even less in two years.
And the time of charging the EV and filling up the gasoline car is about the same I would say as paying works the same (credit card). With the EV after it's plugged in you go to the rest room or restaurant and when you come back, off you go. With the gasoline car you have to stand there while filling up, then go parking, then go to the rest room. At the end of the day, it's the same. And the charging points will grow in line with the EV adoption. It will just explode once we reach a tipping point in a couple of years.
Remember with an EV you can leave home fully charged and when you arrive to your hotel or family or office you can charge again (sure maybe your family/friends have no fast charger yet, but they sure will very soon and you can charge slowly overnight with a regular outlet). With a gasoline car you have to make sure to go fill up before you leave and when you arrive you have to go to a gas station instead of charge it at the parking space you park at anyway.
Regarding environment, when it comes to real trash (plastics and such) you might be right that it is shipped to a poor country and dumped in the sea, but for metals I'm quite sure it is recycled. Metal recycling has existed for decades and is a profitable and relatively local business. Don't forget that gasoline cars consist of a huge amount of metals too.
Again, a lot of what you say is just an excuse for things, not actually refuting what I say.
For example, charging time. It's not even remotely the same. It literally takes less than 1 minute to fill a car, once you start the process. And saying "well, I personally like to stop and sit around for 20 minutes each time I stop for fuel" isn't really responding to the long charge time issue. Or the "only 80%" issue.
I get 650km range an average gas guzzler, but I start looking for fuel well before that. And that's with a gas car, where fuel is plenty, yet there are stretches of the road where it may be 100km with no gas. Yet even in more populated areas of the US and Canada, once you are driving outside of the city, on the interstate, it can easily and often be 50+km between fill ups.
And only a loon would let their vehicle get down to 0km when looking for fuel.
So you need to have 100km+ spare range, always. ALWAYS. And a lot of electrics have 400km range. And .8400=320km. So we're talking about ~ 300km range for electric per fast fuel up, and for a car, 550km range.
And I have 2000km to drive today. Now I have to stop 7 times 25 minutes, let's say 3 hours+, or I can stop 45 minutes, or 20 minutes.
OK. That's the same, right?
But of course:
chargers are missing or no where on a great many routes
* chargers are often not fast chargers
* many hotels don't have chargers
A year ago, I thought of going electric. To drive from Quebec to California takes me 3 days by gas. It takes closer to 7 days by electric, because:
* I cannot drive the same route (rural areas with no chargers)
* Some routes have no fast chargers (so I cannot drive as far as fast)
These are real issues, and they will NOT be solved in a tiny period of time, like 2 years. That's why I say, try 10 to 20 years!
And the problems are absolutely the same for shorter distances. There is a massive lack of fast chargers everywhere. During busy times (Christmas, to visit family!) the existing chargers are often in use.. and you have to wait an hour to get one! No, that problem doesn't exist for gas, there is lots of capacity and waiting means a 1 minute delay, not a 20+ delay per person.
These are real issues. Real problems. Pretending it will just be fine, because "reasons" which don't address the issue, is a problem. And it's lead to another stupidity.
A lack of hybrids.
Hybrids are perfect for the person that wants to charge at home, at the store, do local "stuff", and then when take longer trips once a week, use gas! It is the "bridge". It is the path to large scale adoption without backlash. It is the way to get even resistant people to adopt, and mostly use electric.
It is the key to success, but people are often "all or none", and this is the doom of all good endeavors.
Here's another example. If two magical things happened:
1) every person, today, magically had their car replaced with electric
2) all gas pumps were magically replaced with electric chargers
Society would collapse.
There is not enough transmission capability, to run those chargers. It would be like doubling the number of homes connected to the grid. Not only would there not be enough clean things (nuclear, solar, wind, hydro), and we'd have to scramble to start burning more things we shut down (coal, for example), it would also take years to build more power lines, transformers, to get more power to all those fast chargers.
So yes, it's going to take 10 to 20 years to get everyone electric. Period. There's literally no other way. It isn't just about buying cars, but also about installing chargers, and creating additional power capacity and transformers, and transmission towers, and wire, and on and on and on and on.
This is why hybrids are perfect. They reduce friction in society, whilst at the same time ensuring that if power is hard to get in certain regions, those same people can still use gas until things are fixed.
This is why I am a big h2 proponent. It is an alternate path to electrification. It provides fast recharge, and it also can be produced great distances away, and transmitted by pipe.
But anyhow. You're probably one of these people that think h2 is "hard to do", even though there are 3+ car manufacturers that have h2 with 600+km range, and green h2 can be brought online just as fast as any power plan we'll need as we expand electric car use.
Many modern cars can run up to 1000km from one tank. Electric vehicle is awesome for city daily driver but not so good for long journeys, especially if you cross borders.
Regarding cost of ownership many forget that ev loose value much faster than traditional cars.
What is the point if you spent 1000 less but lost in value 2000 more?
Assuming a big pack of 100 kWh, it would now cost $5.6k instead of $12-13k at the beginning of last year. That's not nearly enough for the price changes you mention. Most battery packs are about half that.
Not only cars, but domestic and grid level batteries too; due to the high attractiveness of installing PV panels, the Dutch energy grid is under pressure, and the cost of electricity is wildly variable in the course of a day. It makes sense to store electricity yourself instead of feeding it back to the grid.
We are so close to the inflection point from where forget electric cars home batteries will make economic sense for the majority. Feed in tariffs received for solar installs home or commercial are falling and as more solar is installed will keep falling so installing batteries and using your own electricity at night instead of selling it for nothing will be the better option.
Cordcutting could be a big deal for local distribution companies as it becomes viable.
Pipecutting (what I call cutting natgas entirely in favour of heatpumps) is already on the radar of our natgas utility: they want to charge new build connection fees up-front instead of recovering over decades.
Now, what if you could coordinate with a couple of neighbours and run a "merged" system that does some accounting to to cover imbalances? Or a shared backup generator?
> Now, what if you could coordinate with a couple of neighbours and run a "merged" system that does some accounting to to cover imbalances?
This is called electrical grid. What you are trying to ask is whether community-owned non-profit electrical utility operators that only minimally buy energy from the main grid will begin to appear in appreciable numbers.
My parents bought the house next door to their own. First thing I did was convince them to install panels and batteries and cut both gas connections and one electricity connection. Now theyre on heat pumps and saving tons because our gas utility keeps jacking up the fees.
I still don’t understand how the electricity infrastructure will be maintained if there is mass on premise battery adoption. Large scale infrastructure will still be required for commercial industry and things like ev charging, but loss of the consumer sector to batteries must have a fairly substantial financial effect on on grid maintenance?
Microgrids or micro-infrastructure will become a thing. The local need will cause infra to spider out to the nearest producers. Not the other way around.
Home batteries haven’t come down in price much for years.
It seems that most of the cost is in everything that’s not a cell, and that stuff is specific to home batteries and hasn’t had economies of scale really kick in yet.
Maybe? But the scarcity of manufacturers of integrated home battery systems is also a thing.
There are some Solar inverters that will just work with anything, but if you want a DC coupled system (for better efficiency, and to absorb inverter clipping) your choices are pretty damn limited right now.
I’m interested to know how this is/will affect the prices of LFP batteries available to consumers off sites like Alibaba. I’ve been toying with the idea of building a DIY 48v off grid system using the typically blue 280-300Ah LFP cells. I never really tracked the price over time though so it would be interesting to see a historical chart of their prices. I assume the shipping costs would make up a decent chunk of their price, though.
I bought LFP batteries from Ali Baba just a couple of months ago. 100ah 3.2v x8 to boost my 100ah 12v to 300ah. Cell prices were about 60% of what they were in August, and curiously smaller in volume.
I bought 16x good quality EVE 280Ah L280K batteries back in 2021.
this was the invoice:
Item Value: $1,869.60,
Freight charge: $403.80 Paypal fee(5%): $113.67,
Other fee: $0.00,
TOTAL AMOUNT: $2,387.07
Amazing, that's a great data point, thanks! Would you be able to give me the name of the company you bought from, if your experience was pretty good with them?
Yea the main problem in my opinion is they are DRM-laden and there is no real competition. I'd be happy for these premium batteries to exist if I could also choose a cheaper alternative e.g. from Decathlon. It's almost like the printer cartridge situation.
Tesla doesn't make their own batteries -- the company instead sources them from Panasonic (NCA), CATL (LFP), LG (NCM), and BYD (LFP).
>> So how does it benefit from some other company making cheap batteries? <<
Tesla doesn't really directly compete in the battery market despite all the hype about Tesla revolutionazing batteries, and is happy to buy from whoever is wiliing to offer the best price.
Tesla has used Panasonic's NCA since 2010's because of their high energy density and low $$/KWh; then came the Chinese LFP around 2020. The Chinese battery makers have enormous price competitive advantage b/c they dominate the raw material supply-chain (ie, mines, refineries). LFP's are however mostly limited to Tesla's base/standard range trims due to their low energy density and weight.
Tesla's Megafactory is making cells based on the NMC chemistry. It's a little more energy-dense than LFP, but has a lower lifespan, depends on Nickel and Cobalt and so is more expensive than LFP batteries.
Also, NMC batteries are much more prone to self-ignition. LFPs are very safe in comparison, although still not as safe as LTO batteries.
Tesla started to adopt LFP cells and purchases them from Chinese suppliers.
Actual news story with sources in the South China Morning Post.[2]
"Capacity utilisation is a major headache for producers in mainland China. The industry produced 747 gigawatt-hours (GWh) of battery power last year, while only 387GWh was installed into products, according to the China Automotive Battery Innovation Alliance. Prices of Chinese battery cells could further decline by 10 to 15 per cent in 2024, dragged down by slowing demand in China’s EV market, according to a report by Haitong International this month."
Somewhere, there is a really big pile of unsold batteries. Fortunately they are lithium-iron-phosphate, which doesn't go into thermal runaway and catch fire.
[1] https://cnevpost.com/2024/01/17/battery-price-war-catl-byd-c...
[2] https://www.scmp.com/business/article/3253116/chinas-lithium...