The reason Electric Cars will be cheaper than ICE cars in 2025

within the space of only 36 months internal combustion engine sales will collapse worldwide this will happen in a similar way to what happened to Blackberry you've seen the Blackberry movie recently Blackberry lost market share an enormous amount of market share within only a space of 2 years in fact the company went from a huge success to a massive failure within a very short space of time that is about to happen to a number of automakers worldwide within the next few years and there is one key reason for why this happen and why will happen so incredibly quickly a lot of people are saying electric cars are too expensive but electric cars have come down in price worldwide by an average of 21% this year making it much more affordable and making the price of EVS much closer to internal combustion engine vehicles but in China they're already on par with internal combustion can the rest of the world get there will we get there when will it happen I think it's likely to happen by approximately 2025 because many people in Australia Thailand America Drive big cars even Europe now we drive bigger cars with well they will need bigger batteries the bigger the battery the more expensive the vehicle however there is one very compelling reason for why EVS will be significantly cheaper next year than they will this year now one of those is production of course mors law the more Vehicles you make the more products you make the more the price comes down that's pretty obvious we all understand that and that's the case clearly for companies like B and Tesla the more they make the more profit they make they make the most Vehicles they make the most profit on every EV they sell B's profit continues to grow as it sells and manufactures more Vehicles so we can see that happening in real time however there's one other key reason for why EVS will be significantly cheaper next year and I don't believe that anyone is actually paying any attention to this it's important it will affect the value of some stock versus others it will affect I think what decisions we should make as investors whether or not we choose to invest in one company versus another hello my friends welcome to the channel I'm Sam Evans you're watching the electric Viking thank you for tuning in welcome to all the new subscribers great to see you and welcome back everyone else in July of last year lithium prices hit their highest point in history they hit an average of 600,000 R&B per ton that was well that's quite expensive it made battery packs go up in price for the first time in many many years this became widely known news the media jumped on this they love this kind of information drastic EVS are going to become more expensive battery pack prices have gone up for the first time in years we told you EVS would not work said Toyota however since then the battery price has come down for total packs and at the cellular level month after month after month and there's a key reason for that lithium carbon prices fell from 600,000 R&B per ton all the way down in July of this year to only 145,000 R&B in other words The price came down by 75% the price then jumped back up to approximately 300,000 R&B or half of its peak however since then prices of lithium carbonate have fallen so as demand has increased I mean Global demand for lithium has actually doubled in the past 12 months but because we have so many mines now producing lithium there's more than what people realized and lithium prices as a result have continued to plummet in fact lithium prices are now back down to only 150,000 R&B or one quarter of the price that lithium was sitting at approximately 1 year ago that is one of the key reasons my friends why byd are making so much money now people keep saying oh byd's prices and they're revenues have gone up but there's really one reason for B success of course they're making more product and that brings the prices down but they cannot control the price of lithium that's an external factor and they've benefited enormously B sells batteries to other companies they also use lithium in their own batteries in their own cars that means the price for their cars for them to manufacture their cars and the price for them to manufacture the batteries that they sell to other companies has come down in enormously for by as a result B's profits have hit record highs but byd has continued to Discount the price of its electric cars in China Tesla has not Tesla in fact are just talking about raising the prices in China in fact they've raised the price of the model 3 Highland significantly versus the previous price of the model 3 they say they're going to be raising prices in about 2 weeks for all models in the lineup why well because it's not the price war that everyone claims it is the truth is here profits are actually growing for some companies because battery pack prices have fallen significantly over the past 6 months a new round of lithium carbonate price declines since the end of June has continued unabated as over Supply concerns persist said CF post on the 7th of November the average price of battery grade lithium carbonate fell to 158,000 R&B per ton a 2year low after fall in for 13 consecutive days separately daily quotes from my steel monitored by CNF post show that battery grade lithium carbonate was sitting at 165,000 R&B per ton down by another 1,000 per ton from the previous day the 9th consecutive day of decline so in other words battery grade lithium prices have fallen by 50% in only a few months however by 74% in 12 months the most expensive component of an EV is the battery approximately 35 to 40% of the cost of an EV is the battery pack and nearly half the cost of the battery pack is the lithium itself as a result EV prices have come down over the past 6 months worldwide and will continue to do so now according to the analy the sky is falling in EV prices are coming down because EVS aren't selling actually that's not true EV sales this year have grown worldwide by over 25% so EVS are selling and prices will continue to come down but one of the key reasons is not just competition it actually is because it's now cheaper to make an EV than it has ever been before trendforce supports my argument they say that China's battery price decline will continue not just this year but next year as well trendforce says that in addition to lithium carbonate which is a key raw material for Batteries China's lithium battery industry is also facing overc capacity China's lithium battery industry over capacity will continue into 2024 and battery prices will still decline next year says market research firm trendforce keep in mind too more battery companies are popping up overseas it's not just the fact that China has an oversupply it's the actual possibility the option now that you have to buy batteries from Japan from the United States from Europe and from South Korea China's lithium battery exports will still perform well in 2024 but the continued release and climb of new capacity key in Point new capacity continued climb and release of new capacity worldwide will lead to a continuation of the overc capacity situation meaning more downwards pressure on battery prices China's average power battery cell prices remained in a downtrend in October and November and power cells for EVS fell by 2% in October from September lithium carbonate cells fell as well battery storage fell by 3.3% but over the past 12 months battery storage prices or battery sell prices to be more precise have actually Fallen by nearly 30% even just in October alone after battery pack prices had fallen significantly sell prices came down by a further 2.2% according to trendforce so the trend here is down and it's not just going down one month it's going down month after month after month catl says it can now build a battery pack in about 2 minutes enough sells for a battery pack in 2 minutes so production is speeding up overs supply of lithium has forced the price PR of lithium down therefore battery pack prices continue to fall and it's not just lithium turnery batteries that are coming down in price lithium ion phosphate batteries are actually coming down as well now keep in mind we have South Korean companies and North American companies also producing their own lfp cells not yet but they will be next year and in 2025 Goan Hightech is building lfp factories in the US two of them two big ones there's also other us manufacturers including a US manufacturer I spoke about who makes the best lithiumion phosphate cells in the world highest energy density at the lowest price but they have not yet scaled up significantly they plan to do so over the next 12 months what happens price comes down the fall in battery sell prices is dragging down the prices of Upstream raw materials as well due to the increased competition from battery companies and the fact we now have more than ever well more batteries than ever being manufactured and coming off cell lines the willingness of battery cell manufacturers to replenish inventory has been reduced leading to a continued decline in lithium battery raw material prices what this means is that catl and B who have made billions and billions of dollars selling batteries are willing to trim margins for market share meaning they're willing to bring down their prices battery grade lithium carbonate was quoted at 165,000 per ton last week since June 23 the average price of battery grade lithium carbonate has fallen by 48% an imbalance between supply and demand is the reason for this round of sustained declines in lithium carbonate price but prices will continue to fall it won't just be next year guys this will happen for the next 5 years in a row because we have an over supply problem worldwide now Toyota would tell you there's only enough batteries worldwide for a 1 Kow battery for every car being made in other words a tiny tiny tiny battery pack not actually true at all in fact if you look at all the batteries that are going to be manufactured all the battery plants that are going to be manufactured over the next 5 years there will be actually too many batteries being made worldwide by 2030 for what the world actually needs to move away completely from fossil fuels to a sustainable energy Market there is simply too many factories being built to manufacture batteries it's like a gold rush everyone jumped on at the same time and if you look at the commitments from CHL BD LG Energy Solutions Samsung SDI Panasonic and of course other companies like SK on and then you look at all the battery factories of from the companies that you don't really know that much about you put it all together you're looking at terawatts upon terawatts of battery production I don't know the exact number but it is absolutely enormous it's way more than we need for 70 million cars to be made per year and it's far more than what we need for pretty much the entire world to move away from fossil fuel cars within a very short space of time people think I'm crazy saying this but I can guarantee you within 5 years they'll be saying oh look we've got way more batteries than we need toyoto is making things up and actually EVS are now cheaper than internal combustion who would have thought well it's coming anyway let me know if you agree with me or you disagree in the comments thank you for watching bye-bye

Channel: The Electric Viking

Views: 90,511

Keywords: electricvehicles, evs, #electriccars, electricfuture

Id: 2h-6cG1HlQ0

Length: 12min 26sec (746 seconds)

Published: Sat Nov 11 2023