Estimated direct costs of fully domestic lithium-ion battery cell production in the European Union and China, and key drivers to reduce the cost gap

Sources

IEA analysis based on data from IEA (2024) Energy Technology Perspectives, BNEF and CRU.

Notes

USD (2024). Production costs refer to the estimated average direct manufacturing cost in the European Union if key battery components (cathode and anode active materials) were produced domestically (left) and the estimated production cost of leading Chinese manufacturers in China (right). Production costs refer to batteries using lithium nickel cobalt manganese oxide (NMC) 811 as cathode active material (CAM) and synthetic graphite as anode active material (AAM). CAM and AAM are inputs of the cell production cost and include indirect manufacturing costs such as administrative, retail, and R&D costs, and profit margins. “Others” include capital and maintenance costs, labour, other materials (such as electrolyte, current collectors, and casing), CO2 cost, and manufacturing inefficiencies. Yield increases and automation refers to production cost in the European Union at the same manufacturing efficiency and labour intensity as in China. Energy prices reflect the energy prices for the overall industrial sector. Imported battery components refer to imports of CAM and AAM, specifically. Please see Annex A for full assumptions and costs used.