EV battery makers take a hammering

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EV battery makers take a hammering

Prices of electric vehicle (EV) batteries are falling rapidly due to oversupply and slow growth in demand, affecting battery makers’ profitability, a source has found.

According to Bloomberg New Energy Finance, an information provider for renewable energy and smart technology, the average price of lithium-ion battery packs for electric vehicles plunged 14 percent to $689 per kilowatt-hour in the first quarter this year, down from $800 per kilowatt-hour in the same period last year. The latest price represents a 30 percent nosedive from 2009.

The source expects the figure to decline further to $150 by 2030.

Such rapid drops stem from excess production that has surpassed demand, the source added.

“Demand for electric cars remains low, while manufacturers are making aggressive investments,” said Angus MacCrone, an analyst at Bloomberg.

Global EV battery production reached a total of 10 gigawatt-hours last year, which is equivalent to batteries for 400,000 electric cars. The figure is forecast to hit 17 gigawatt-hours by late next year.

However, only 43,237 electric cars were sold worldwide in 2011.

“Although the falling trend in battery prices is not good news for battery manufacturers, it is essential to the long-term growth of the industry,” said Michael Liebreich, a senior researcher at the information provider.

He underlined that the battery price index will become a key gauge for the auto industry.

Meanwhile, leading EV battery makers in Korea are suffering heavy losses.

SB LiMotive, a joint venture between Samsung SDI and German auto parts firm Bosch, posted a 175.5 billion won ($154 million) loss in operating profit last year. It posted sales of 30 billion won. “As the EV battery market is still so small, companies are spending more than they earn,” said an industry insider.

By Song Su-hyun [ssh@joongang.co.kr]
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