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Volume, integrated supply chain can lower costs for commercial EV batteries

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A steady stream of headlines illustrates significant progress in commercial vehicle markets. New technologies come to market regularly, and tens of millions of incentive voucher dollars are fully reserved in minutes. However, the zero-emission electric commercial vehicle market has a challenge at its core – battery sourcing and supply conditions.

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CALSTART has recently released its Commercial Vehicle Battery Cost Assessment: Strategic Sourcing Challenges for North American Truck and Bus OEMs and Tier 1 Suppliers, to provide insight on the factors affecting battery costs for the U.S. commercial vehicle industry and offer an overview of the current state of battery sourcing and supply chain considerations.

Some of the key points in the report include:

  • There is a range of battery costs across manufacturers and forecasts that should be viewed in the context of manufacturing volumes and the different levels of experience of manufacturers with battery electric vehicles.
  • Battery pricing reflects the early commercialization stage for commercial vehicles and the existing range in scale and expertise of battery sourcing among manufacturers.
  • Battery manufacturing at scale remains one of the greatest obstacles to achieve price parity with conventionally fueled vehicles but this could be accelerated by a more rapid rollout of zero emission commercial vehicles.
  • Battery purchasing dynamics are different for commercial vehicle manufacturers that have not achieved high sales volumes.
  • Some electric commercial vehicle manufacturers can leverage scale and more attractive pricing from battery sourcing and/or production activities in markets outside North America.

The report concludes with noting that battery-cost disparities will likely persist across the industry as electric commercial vehicle manufacturers continue to evolve and grow at different rates. Efforts to address cost and scale will be key for early-stage manufacturers to compete and successfully deliver products that meet fleets’ budgets. Therefore, purchase incentives and other policies are needed to help early-stage manufacturers and specific vehicle platforms while they are at sub-critical volumes.

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