(Yicai) Jan. 17 -- Chinese power battery giants, including Contemporary Amperex Technology and BYD, are going all out to further lower the production costs and prices of batteries.

CATL is promoting 173-ampere-hour lithium iron phosphate battery cells using VDA specifications set by the German automotive industry to carmakers, 36Kr reported yesterday, citing sources.

Such cells, which have a fast-charging capability of 2.2C, are priced at no more than 40 Chinese cents (6 US cents) per watt-hour, so they can be equipped on all-electric vehicles with price ranges of CNY100,000 to CNY200,000 (USD14,035 to CNY28,070), the sources added, noting that several automakers will switch to this type of cells by the mid-year.

BYD’s affiliate firm FinDreams Battery recently issued an internal letter urging its team to continue lowering costs given the ample room for cuts. Moreover, FinDreams noted that it will keep on enhancing the management and control of non-producing materials to further reduce costs and improve efficiency this year.

Last month, Svolt Energy Technology said it would cut manufacturing costs by 40 percent and procurement and technology costs by 20 percent. The company had to lower procurement costs of core supplies by between 15 percent and 20 percent, Chairman Yang Hogxin said, adding that this is a move that must be done despite the pressure in order to survive the industry’s fierce competition.

The battery industry experienced an oversupply that led to continuous price declines across the whole supply chain last year, according to experts. With the price war in the Chinese new energy vehicle industry proceeding full steam ahead, battery prices will inevitably decline, as they make up 30 percent to 40 percent of an all-electric car’s total cost.

Prices of battery-grade lithium carbonate, a raw material for EV batteries, plunged 81 percent to CNY101,000 per ton as of Dec. 31 from a year earlier, according to data from industry website SMM.Cn. Prices of other battery materials, such as electrolytes, cathode materials, artificial graphite cathodes and cells, fell 20 percent to 70 percent.

Square lithium iron phosphate batteries were available at 43 Chinese cents per Wh in China at the end of last year, down 48 percent from a year earlier. Prices of square ternary power batteries fell 44 percent to 52 Chinese cents per Wh, and square lithium iron phosphate energy storage battery prices plunged 51 percent to 47 Chinese cents per Wh.

Editor: Futura Costaglione