Takeaways

• Stellantis and CATL have joined forces to invest up to Eur 4.1 billion in an LFP greenfield battery plant in Spain.

• Western OEMs face the critical choice of which battery type to use and whether to develop batteries in-house or through collaboration with other companies.

• Top Chinese battery manufacturers achieve super-low costs through several key strategies that give them a cost advantage, particularly as price competition intensifies and puts pressure on profit margins.

• The passenger EV segment, average battery pack prices have now dropped below $100/kWh, widely regarded as the threshold for achieving cost parity with ICE vehicles. Naturally, this parity point varies depending on factors such as vehicle segment, pack size, and region.

• Like Stellantis, European OEMs should set up more partnerships: collaboration, unlike coercion, as advocated by the EU, has several advantages such as de-risking projects, sharing cost/capex, technology transfer, and learning in high-performance industrial processes.