Key Takeaways
1. CATL’s subsidiary Ning is reducing electric vehicle battery replacement costs by introducing a new repair service, lowering expenses by up to ten times.
2. The average battery replacement cost is currently around $13,750, which can be more than half the value of a new electric car in China.
3. Structural battery packs (cell-to-pack designs) are more cost-effective for manufacturers but complicate repairs due to their integration into the vehicle’s frame.
4. Many EV manufacturers use structural battery packs, leading to high repair costs and potential depreciation issues in the second-hand EV market.
5. CATL aims to improve the used EV market by offering longer warranties, battery swap stations, and affordable repair techniques.
Facing a surge of electric vehicles nearing the end of their warranties in the coming years, the largest battery manufacturer globally is working on making battery replacement costs more reasonable, as they currently stand at about half the vehicle’s worth.
New Repair Services
Ning, a subsidiary of CATL, has just introduced a new structural battery pack repair service that cuts the average replacement cost down by a factor of ten. CATL’s research indicates that the typical expense for battery replacement is around $13,750, which is nearly 51% of what a new electric car typically costs in China, its primary market. For second-hand electric cars, replacing the battery could end up costing more than the car’s remaining value.
This situation is quite problematic for the used EV market and many owners faced with such steep costs after their battery’s lifespan may simply decide to get rid of their cars.
Understanding Structural Battery Packs
Structural battery packs, also known as cell-to-pack (CTP) designs, integrate battery cells into the vehicle’s structural frame, making them cheaper for manufacturers to produce. Tesla has pioneered this concept with its 4680 batteries, which are used in certain batches of the Model Y. These larger 4680 cells provide structural support without needing costly metal casings, which make battery packs easier to replace. However, a teardown of the Model Y and Cybertruck’s structural battery packs revealed that the cells are integrated into the frame, using a significant amount of hard-to-remove adhesive, complicating the repair process.
Many electric vehicle manufacturers have adopted similar structural packs, leading to high repair costs and potentially creating a stagnant second-hand EV market once the battery warranty ends. Consequently, CATL is exploring ways to reduce the depreciation of electric vehicles through various initiatives, including offering 15-year battery warranties, establishing a network of battery swap stations, and developing new repair techniques.
Cost-Effective Solutions
Rather than replacing the entire structural battery pack, which can be more than half of the cost of a new EV, CATL’s Ning aftermarket service has found ways to repair these packs for between $1,375 and $2,750, which is up to ten times less than a full replacement. This strategy will enable CATL to maintain an affordable supply chain from cell manufacturing to budget-friendly replacements, which could significantly benefit the used electric car market, given CATL’s position as the largest EV battery producer in the world.
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