The Stellantis Group decided to use batteries with a more affordable chemistry, but with a lower energy density, as a result of the company’s attempts to reduce the prices of electric cars.
Carlos Tavares, Stellantis CEO, said during the presentation of the group’s financial results that it will abandon nickel-manganese-cobalt (NMC) batteries for electric cars produced in Europe, to cope with the price pressures it is putting in this market moment.
Stellantis brands will henceforth use Lithium-Iron-Phosphate (LFP) batteries, cheaper batteries that are widely used by Chinese manufacturers, but also by Western automakers that have large Chinese companies as suppliers, such as CATL .
Tesla cars, as well as Dacia Spring, have these lithium and iron batteries in common. Ford has also announced that it will build an LFP battery factory to reduce battery costs by 15-20%.
“We need LFP and we will have LFP because it’s a competitive cost position to make cars affordable for the middle class,” Tavares said, without giving an exact date for those batteries to go into production.
Stellantis already has several contracts signed for the production of NMC batteries at planned plants in France, Germany and Italy, but would also sign contracts for LFP batteries to meet the need for such batteries for its cars in the European market .
Production costs between the two types of batteries have fluctuated significantly in recent years, but market analysis shows that in 2022 a price of $98/kWh for NMC and $66/kWh for LFP had been reached, production prices for battery cells.
At the automaker, the selling price plus battery assembly costs bring the final price to over $100, but with a level exceeding $150/kW for batteries using a nickel-based chemistry.
Beyond the price, the two types of batteries differ by the energy density they offer, which means that for an identical occupied volume, the batteries offer a greater capacity and, implicitly, an increased autonomy. In contrast, LFP batteries allow charging to 100% of capacity without cell degradation, while NMC batteries are limited to 80% to protect the cells.
