Fearing an E-Powered Price War
German electric carmakers have shied away from producing their own batteries for fear of competing with Asia’s low prices. Since China announced plans to command the market, industry players are on guard.
Batteries are the nerve center of the electric car. Electric vehicle (EV) battery technology determines the limit to how far one can travel per charge, and also the speed of recharging. Around 40 percent of an electric car’s value is based purely on the battery alone.
EV batteries are a lucrative field, but one most German auto makers have been holding back from. Merecedes’ parent company Daimler collaborated on the technology with German chemicals firm Evonik, a project which it abandoned in late 2015 for lack of prospective buyers. Daimler’s “Made in Germany” cells were too expensive compared with Asian competitors.
Now China plans to take on a leading role in the e-car batteries market, and are closer than one might think. Chinese producers will try to push sales in 2017 by selling lithium-ion batteries for lower prices. In January, Shenzhen-based market researcher Gaogong Industry said that the price of batteries produced in China are expected to fall between 35 to 40 percent this year.