![]() ![]() 1 Yearly revenues for all cell manufacturers (top, log scale) and pureplay gigafactories (bottom, linear scale). The majority of gigafactories are reporting thin margins in the 1-3% range, with top-tier players able to reach 8-10%.Įconomies of scale bear out in the gross profit data, as a 100x in scale (revenue) leads to ~6x in profitability.ĬATL's dominance continues, reaching $47B USD in revenue, capturing +30% of the EV battery market.īYD, Tesla, and CATL lead R&D spending with ~$1B USD each, ~5% of revenue.įig. It’s notable though, that consumer electronics batteries maintained higher profitability of approx 11%. Here’s a specific case: Samsung SDI’s EV battery division reported a profit margin of 1% for the first time, after reporting fat losses between 20. Based on these conditions, it’s likely that China’s dominance has been significantly bolstered by the $60B–$100B in government subsidies for the sector. ![]() Throw in a 10-30% scrap rate during the first 3 years of operation, and you get the picture. Not only do you have a low-margin product, but you also have high capex requirements to get them made - $100M/GWh/yr as reported by Billy Wu at the recent International Battery Seminar conference. Gigafactories face pricing pressures from raw material suppliers (70% of cell producer costs) and EV manufacturers. The battery gigafactory business is now merely a commodity volume-manufacturing proposition. Meme 1 The wilting of spinach represents the thin margins that battery manufacturers have to operate with.įorget all notions of glitz and glamor.
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