Everyone interested in electric vehicles knows that they are significantly more expensive than the ones with petrol or diesel engines. Even among EV manufacturers are large price gaps, too. German EVs are way more expensive than those made by Chinese brands like BYD and MG.
One reason for the price gap is obviously coming from the brand’s image. But there’s one more reason that has nothing with the long-standing reputation of Mercedes or BMW, but rather with the batteries.
Limited supplies for EVs
Each EV runs on a lithium-ion battery. With an ever-growing surge in demand, it is hard for lithium mines to keep up. The lithium supply in general is limited, resulting in a high battery cost.
Although each EV manufacturer is struggling with the rising battery cost, it seems Chinese EV brands are somehow immune. BYD, for instance, has its own battery supply chain. The reason for that is that BYD, long before entering the automotive industry, was a rechargeable battery producer. Now, BYD is the world’s second-largest lithium-ion battery maker.
The largest lithium-ion battery maker is CATL, also a Chinese company. It has 13 battery-production facilities, almost all of them located in China. That’s a reason why EVs made in China are so affordable: with strong government support and locally available batteries, Chinese EV manufacturers can easily undercut every price their Western counterparts set.
Featured image: Nio