Amperex Technology, the world’s largest battery manufacturer, is among those supplying what it calls “medium-nickel, high-voltage” batteries. Technological changes, plummeting prices for battery materials, and changing consumer preferences have all helped fuel this format.
Medium nickel, high-voltage cells a “major force” for electric vehicle sector
According to data from Shanghai Metals Market, Chinese car manufacturers, including Xiaomi, Li Auto and Zeekr Backed by Zhejiang Geely Holdingalready use medium-nickel high-voltage batteries. Meanwhile, South Korea’s LG Energy Solution expects to start producing such batteries next year, Bloomberg reports.
The adoption of medium-nickel, high-voltage batteries could be a “major force” for the electric vehicle sector, according to CNGR Advanced Material, a major supplier of battery materials. drivers are looking for a longer driving range.
Average production costs of medium nickel high-voltage battery cells are lower, but can achieve energy densities similar to high nickel cells / Bloomberg
The Chinese are responding quickly to market needs
China’s electric vehicle and battery giants have typically led the charge in changing battery chemistry, responding quickly to changes in commodity markets or driver requirements. The earlier era of very high nickel and cobalt prices — along with concerns about shortages — caused a shift away from NCM and toward LFP (lithium iron phosphate) cells
But since then, battery metal prices have collapsed. LG Energy, a South Korean battery maker, said High-voltage medium-nickel batteries can reduce costs by 10 percent through increased energy density and thermal stability.
Mass of metals in a battery / Bloomberg
Low prices of raw materials and technology slow down the transformation
A few years ago, medium-nickel cathodes were expected to be almost completely replaced in the near future. “The current low price of cobalt and safety concerns for high-nickel batteries have dramatically slowed that transition,” Iola Hughes, head of research at consulting firm Rho Motion, told Bloomberg.
The share of medium-nickel batteries in China’s NMC production has risen to almost 60%, from about 40% in early 2023, according to CRU. Analysts say this is helping to at least slow the march of LFP and is introducing some uncertainty about how battery technology will develop.
Historically, medium nickel chemistry could only operate at lower voltage levels compared to high nickel. However, a number of technical changes have enabled this type of battery to operate more safely and sustainably at higher voltages as well.
With supply high, nickel prices remain relatively low, near $16,000 a ton. Cobalt has fallen to its lowest level in almost eight years, and lithium is at its lowest level since 2021. That means overall battery costs are much lower, but in a fiercely competitive market, automakers still have to adjust to cost and performance.
