I. Introduction

1.1 Research Background and Objectives

In today’s era of rapid growth in new energy, lithium‑ion battery cells, as core components, are widely used in electric vehicles, energy storage systems, and many other applications, underscoring their critical importance. Ternary lithium‑ion cells and lithium‑iron‑phosphate cells, each with distinct characteristics, occupy pivotal positions in the market. A thorough analysis of their cost structures and component shares can provide essential guidance for manufacturing, pricing strategies, and investment decisions. For the two‑ and three‑wheel electric vehicle industry—key application areas for lithium‑ion battery cells—clarifying market price trends for battery packs helps all links in the supply chain monitor market dynamics, optimize resource allocation, and enhance competitiveness. Consequently, this research is highly relevant and practically valuable.

1.2 Research Methods and Data Sources

This study employs a comprehensive array of methods, including literature review, data analysis, and comparative case studies. We have extensively collected authoritative industry reports and academic papers from both domestic and international sources, conducting in-depth readings to establish a robust theoretical foundation. We also meticulously dissect product information and financial statements from corporate websites to extract primary data, while leveraging data from e‑commerce platforms and specialized market research firms to gain a comprehensive understanding of market price dynamics. By cross‑validating and complementing multiple data sources, and subjecting them to rigorous screening, organization, and analysis, we ensure that our findings are authentic and reliable, accurately reflecting the intrinsic characteristics and evolving trends of cost structures and market prices for the two categories of lithium‑ion battery cells.

II. Overview of Lithium Battery Cells

2.1 Working principle of lithium-ion batteries

As the core component of a lithium battery, the lithium‑ion cell operates on the principle of the directional migration of lithium ions between the positive and negative electrodes. During charging, lithium ions desorb from the positive electrode material, travel through the electrolyte to the negative electrode, and intercalate into its crystal lattice; during discharging, the reverse occurs: lithium ions deintercalate from the negative electrode, migrate back to the positive electrode via the electrolyte, and electrons flow through the external circuit, generating an electric current and enabling the mutual conversion of chemical energy and electrical energy.

2.2 Comparison of the Characteristics of Ternary and Lithium Iron Phosphate Cells

Ternary lithium battery cells use nickel, cobalt, and manganese ( NCM ) or nickel-cobalt-aluminum ( NCA ) and other multi-component materials as the cathode, offering a high energy density; current mainstream products can achieve an energy density of up to 180 - 260 Wh/kg It can deliver longer driving ranges, meeting consumers’ demand for extended range; however, its thermal stability is poor, making it prone to thermal runaway under high-temperature conditions or in the event of an internal short circuit, which poses a relatively significant safety risk. Moreover, due to its reliance on scarce metals such as nickel and cobalt, its cost is highly sensitive to fluctuations in raw-material prices.

Lithium iron phosphate cells use lithium iron phosphate ( LFP ) Used as the positive electrode, it features a stable crystal structure, excellent thermal stability, a wide operating temperature range, and resistance to decomposition at high temperatures, resulting in extremely high safety. Its energy density typically falls within 140 - 180 Wh/kg Although its energy density is lower than that of ternary lithium cells, it is sufficient to meet the demands of most short- and medium-distance travel scenarios. Moreover, its raw materials are widely available, and its cost is primarily driven by lithium carbonate, which remains relatively stable. With no reliance on scarce and expensive metals such as cobalt, it boasts a significant overall cost advantage.

III. Cost of Ternary Lithium Battery Cells Composition and Proportion

3.1 Cost composition

3.1.1 Material cost

In the cost structure of ternary lithium battery cells, material costs dominate, accounting for as much as 70% Left and right.

Cathode material The cost share is the most significant, reaching   30% - 40% This is because the cathode material, as a key factor determining battery energy density and performance, involves complex R&D and manufacturing processes and relies on metallic raw materials such as nickel, cobalt, and manganese. The prices of these raw materials are subject to significant volatility, driven by global supply-and-demand dynamics, geopolitical factors, and resource‑related monopolies.

Negative electrode material Artificial graphite is widely used and accounts for a significant portion of the cost.   5% - 15% With technological advancements, graphite‑based material production processes have become increasingly mature, and costs have remained relatively stable. However, high‑end anode materials such as silicon‑based composites require substantial R&D investment and incur higher upfront costs; nonetheless, they can significantly enhance battery performance and are expected to reshape the cost‑composition landscape in the future.

Electrolyte Cost share 20% - 30% Lithium hexafluorophosphate, used as the solute and carbonate esters as the solvent, is produced under stringent conditions, with a slow ramp-up in capacity. In the past, supply shortages have led to sharp price spikes, significantly increasing the cost of electrolytes.

Diaphragm Cost ranges between   15% - 30 % As a critical component that isolates the positive and negative electrodes and prevents short circuits, it demands extremely stringent specifications for material quality, porosity, and stability. Both wet‑ and dry‑process manufacturing methods have their respective advantages and disadvantages, and high‑end separator products, owing to their high technological barriers, remain priced at premium levels.

3.1.2 Manufacturing cost

Manufacturing cost It covers equipment depreciation, labor, energy consumption, and other costs, accounting for approximately the cost of a ternary lithium battery cell.  30% Battery production requires high-precision coating machines, winding machines, formation equipment, and more; the initial capital investment in such equipment is substantial. For example, building a new… GWh Take a production line as an example: the equipment procurement cost can reach several hundred million yuan, based on the equipment’s service life. 5 - 10 Annual depreciation calculation results in high annual depreciation expense.

3.2 Cost Breakdown Details

IV. Cost of Lithium Iron Phosphate Battery Cells Composition and Proportion

4.1 Cost composition

4.1.1 Material cost

Lithium iron phosphate The cathode material dominates the cost, accounting for approximately 40% - 50% It is synthesized from lithium carbonate and iron phosphate, and fluctuations in the price of lithium carbonate have a significant impact on its cost; for example, if the price of lithium carbonate were to halve from its peak, the cost of lithium iron phosphate cathode material would decline substantially.

Graphite The negative electrode material accounts for 10% - 20% It predominantly uses synthetic graphite, which benefits from a mature manufacturing process and relatively stable costs; moreover, as graphitization capacity expands, there is further room for cost reduction.

Electrolyte Cost share 15% - 25% Lithium hexafluorophosphate serves as the core solute; as production capacity for lithium hexafluorophosphate expands, the previous price premium driven by supply shortages has eased, and its share of total costs has stabilized.

Diaphragm Cost share 5% - 15% Dry and wet processes are developing in parallel, with domestically produced separators steadily gaining market share thanks to their cost‑performance advantages, while costs are becoming increasingly manageable through technological advancements and economies of scale.

4.1.2 Manufacturing cost

Lithium iron phosphate (LFP) battery cells benefit from a mature manufacturing process and a relatively streamlined production flow, giving them a cost advantage over ternary lithium battery cells; they account for approximately the total cost. 20% - 30% Although capital expenditures remain substantial, depreciation expenses are relatively low due to mature processes and the high versatility of equipment. Labor costs benefit from cluster‑based regional advantages, with cost advantages in areas rich in labor resources. In terms of energy consumption, production conditions are comparatively lenient, resulting in lower energy‑related costs than those associated with manufacturing ternary lithium‑ion battery cells. Under large‑scale production, fixed costs are spread more efficiently, further reducing unit manufacturing costs.

4.2 Cost Breakdown Details

As shown in the chart, the cost structure of lithium iron phosphate cells is characterized by… “ Pyramid ”  Its structure features a pyramidal positive electrode material and a robust, wide‑base design, contrasting sharply with the cost architecture of ternary lithium cells. This highlights its cost stability and significant potential for further cost reduction, providing solid cost support for downstream applications—particularly in cost‑sensitive segments such as two‑ and three‑wheel electric vehicles and energy storage.

V. Current Cost per Watt-Hour (Yuan /Wh )

5.1 Ternary lithium battery

2024 In [year], the cost per watt-hour of ternary lithium batteries was approximately... 0.4 Yuan -1.1 Yuan between them, depending on the battery’s specifications and quality. For example, a model launched by CATL 173Ah VDA For lithium iron phosphate batteries of this specification, the cell price per watt-hour is kept at 0.4 Within RMB; cost per kilowatt-hour: the price of a ternary lithium battery is approximately 1000 Yuan -1100 Yuan /kWh .

‌ From a technical standpoint, while high-nickel, low-cobalt formulations reduce certain costs, investments in new material R&D and process optimization drive up upfront expenses.

5.2 Lithium iron phosphate battery

2024 In [year], the cost per watt-hour of lithium iron phosphate batteries was approximately... 0.4 Yuan -0.95 between yuan. For certain models, the cell price per watt-hour of lithium iron phosphate batteries can be kept as low as 0.4 Within RMB; the cost per kilowatt-hour for lithium iron phosphate batteries is approximately 800 Yuan -950 Yuan /kWh‌ . In terms of raw materials, lithium carbonate prices have stabilized, and extensive resource reserves ensure a steady supply; technological advancements such as blade batteries, CTP Technology enhances energy density, streamlines processes, and reduces costs by more than… 15% ; Industrial synergy fosters close collaboration between upstream and downstream enterprises, optimizing processes, sharing benefits, and strengthening cost advantages.

Six , Conclusion

This study conducts an in-depth analysis of the costs of ternary and lithium iron phosphate battery cells, revealing that the former exhibits high material costs, significant price volatility due to scarce metals, and substantial manufacturing expenses, whereas the latter features a stable cost structure, widely available raw materials, and lower production costs. Currently, the cost per watt-hour of ternary lithium battery cells is…  0.4 - 1. 1  Yuan , lithium iron phosphate  0.4 - 0. 95 Yuan In the market for battery packs used in two- and three-wheeled electric vehicles, prices are influenced by cell costs, brand, capacity, and supply‑demand dynamics, resulting in varying price levels across different specifications. In short, lithium‑ion cell costs are subject to dynamic fluctuations driven by raw material prices, technological advancements, and market conditions, causing corresponding volatility in market pricing. Companies and industry players must accurately monitor cost trends and respond flexibly to shifting market conditions.