(Yicai Global) Feb. 17 -- Chinese power battery giant Contemporary Amperex Technology is planning a deal with carmakers Li Auto, Nio, Huawei Technologies and Zeekr that will reduce battery prices, according to tech news outlet 36Kr.

According to the plan, CATL will provide batteries based on a reduced lithium carbonate price of CNY200,000 (USD29,067) per ton in the next three years, and the automakers will commit to buying 80 percent of their batteries from CATL in return, 36Kr reported today, citing a source in the industry chain.

The plan will come into effect in the third quarter once the parties reach full agreement, the source said, with some carmakers already in the process of signing contracts. Tesla China was not among them.

Ningde-based CATL has also proposed a 10 percent price cut to its upstream suppliers, a material supplier said.

The plan will put a lot of pressure on other battery manufacturers, according to an industry source.

Lithium battery prices jumped last year, alongside surging lithium carbonate costs. CATL raised its battery prices by 40 percent in 2022, based on a 40 percent hike in material prices, passing on cost pressures to automakers, according to a person familiar with the matter.

Power battery prices account for 40 to 60 percent of electric vehicle production costs, and it is almost like carmakers are working for CATL, said Zeng Qinghong, chairman of state-owned vehicle producer GAC Group. So some have been trying to produce batteries themselves, or seek new battery suppliers.

The price of lithium carbonate for battery production is currently at CNY470,000 per ton. However, it is expected to drop to between CNY350,000 and CNY400,000 per ton in the second half, Ouyang Minggao, a member of the Chinese Academy of Sciences, said at an industry meeting today.

Editor: Tom Litting