BYD’s next-gen Blade battery to reduce cost by 15% in 2025

BYD aims to stay ahead in the fierce EV battery price war with a new generation of its Blade battery that promises higher energy density, faster charging, and reduced costs.

As the world’s second-largest EV battery manufacturer, BYD is gearing up to launch its second-generation Blade battery in the first half of 2025. The new battery aims to achieve a 15% cost reduction compared to its current version while offering significant improvements in overall performance.

BYD versus CATL

The next-gen Blade battery will be available in two configurations. The ‘short blade’ version will have an energy density of 160 Wh/kg. Meanwhile, the ‘long blade’ version will increase energy density to 210 Wh/kg.

This marks a significant step up from the current Blade battery, which offers an energy density of around 150 Wh/kg. The new battery will reduce costs and support longer driving ranges and faster charging times for EVs.

The launch of the next-gen Blade battery comes amid a heated price war in the EV battery industry. While automakers have been slashing EV prices to boost demand, battery suppliers are competing fiercely to cut costs and win contracts.

CATL, the industry leader with a 46.2% market share in China, has significantly lowered its battery prices in recent years. For example, it now offers LFP batteries at 0.35 yuan/Wh (€0,046/Wh), down from 0.9 yuan/Wh (€0.12/Wh) two years ago.

CATL remains the dominant force in the EV battery sector. Between January and October 2024, the company supplied 183.02 GWh of batteries for electric vehicles, representing a 45.2% increase from the same period in 2023.

Better tech, lower costs

BYD’s focus is not just on cost-cutting but also on advancing battery technology. The second-gen Blade battery will leverage BYD’s improved manufacturing processes, allowing it to be produced more efficiently and at a lower cost.

Both battery versions will improve on the core safety features that made the Blade battery famous, including passing the nail penetration test, considered one of the most rigorous safety tests in the industry. Since its debut in 2020, the Blade battery has been synonymous with safety, durability, and longevity.

Falling battery prices for cheaper EVs?

The broader EV battery industry is also experiencing a major shift. According to Goldman Sachs Research, global EV battery prices will drop by 50% between 2023 and 2026. Prices have already fallen from $153 per kWh in 2022 to $149 in 2023, with projections of $111 by the end of 2024 and just $80 by 2026.

Such a drastic reduction could make EVs more competitive with internal combustion engine vehicles on an unsubsidized cost basis. With Tesla already using BYD’s Blade batteries for its Model Y, produced at its Berlin Gigafactory, BYD is also seeking to expand its presence among Western automakers.

But the company’s vision for its second-generation Balde battery extends beyond EVs. With the second-gen Blade battery, BYD aims to support a circular economy model, where retired EV batteries are repurposed for energy storage. This will reduce waste and open up new revenue streams for the company.