The costs associated with everything in the battery pack from chemistry, assembly, logistics through to end of life.
Battery Value Chain
The battery value chain looks at the whole eco system from mining the raw materials through to recycling.
Chemistry
Cell chemistry is driven by energy density, but perhaps primarily by cost. With the increasing cost of cobalt we have seen a shift to higher nickel content. The critical material prices can be quite volatile and hence it can be very important to understand the composition of any cell that you select – Key Minerals in a Battery.
Power versus Energy Cell Cost
Previouly we have looked at the fundamental differences between the power and energy cells, but why is there a Power versus Energy Cell Cost difference? Typically, energy cells cost ~80-100 $/kWh in 2024 and power cells ~150-300 $/kWh. Although, there are some exotic power cells that cost ~$600/kWh.
NMC vs LFP Costs
The Q4/2023 breakdown of NMC vs LFP costs is interesting as a point in time regarding the full cost comparison and potential as well as the current competition between Europe vs. Chinese supply chains. Here we have a comparison pulled together by P3 Group.
Cell Manufacturing Costs
Lithium Battery Manufacturing Equipment CAPEX
First indicator in the breakdown of a total ~$36 million/GWh Capex cost. Of which 1/3 of that is for formation and aging.
Pack Costs
Pack to Cell Cost Ratio
This shows that the average of 70% cell cost stands. The improvements from 2019 to 2022 in reducing the costs of “everything else” other than cells was brought about by the focused design and engineering approaches that included:
- reduced module count
- cell to pack
- optimised BMS hardware
- single layer pack design
Pack Certification Costs
Certification and compliance costs are a growing share of pack-level spend, particularly under the EU battery passport requirements — see The Cost of Producing a Battery Passport for a breakdown of the software, conformity-assessment and per-unit marking costs involved.
Pack Manufacturing Costs
When looking at battery packs it is worth looking firstly at the Pack Assembly Bill of Process.
Pack Logistics
Logistics costs are shaped heavily by regulatory compliance, especially for end-of-life or damaged cells — see End-of-Life and Damaged Battery Transportation for the packaging, labelling and hazmat requirements that drive up shipping costs.
Pack Recycling Value
See What’s the Value of an Old Battery Pack? for how recycling and second-life value is assessed as a pack ages.
See also: Battery Value Chain, The Truth Behind Second-Life Batteries