Chinese Batteries More Than 30% Cheaper, Giving China’s EV Makers a Cost Edge Despite Robot Disadvantage

[Financial News] South Korea’s auto industry has a factory automation level roughly four times higher than China’s, but it appears unable to avoid being outcompeted on cost by Chinese electric vehicle makers that have built supply chains spanning batteries, materials and parts. A key factor is that battery production costs in China are estimated to be as much as 35% lower than in South Korea, North America and Europe.
According to the International Energy Agency (IEA)'s report, "Global EV Outlook," released on the 11th, South Korea’s auto industry had the highest robot density among major car-producing countries, with one robot for every 3.5 workers. China had one robot for every 13 workers, meaning South Korea’s robot density was about 3.7 times higher than China’s. Germany, Japan and the United States also had lower automation levels than South Korea, with more than 6.5 workers per robot.
However, the IEA said the cost of producing battery electric vehicles in China is about 35% lower than in advanced economies.
That suggests factory automation alone, even when powered by robots, is not enough to catch up with China’s cost advantage in EV production.
The main source of that gap is batteries, which account for about one-third of the direct production cost of an electric vehicle.
In 2025, battery prices for EVs in China were 35% lower than in Europe and 30% lower than in North America. As a result, the price gap with vehicles produced in Europe widened by 5 percentage points in just one year, from 30% in 2024.
China has built a supply chain that runs from refining critical minerals to battery materials, cells and packs, and finally to vehicle assembly. Low-cost lithium iron phosphate (LFP) batteries, large-scale production and high factory utilization rates have also helped reduce costs.
For example, BYD can produce batteries and finished vehicles together, allowing it to cut outside procurement margins and logistics costs.
Lower production costs do not directly translate into higher profitability, but Chinese EV brands are seen as using a survival strategy to overwhelm global rivals.
Analysts say the strength of Chinese EV makers lies in their ability to sustain prices that competitors cannot endure, even at the expense of lower margins.
In fact, if major brands that survived China’s domestic price war expand overseas investment by leveraging their cost advantage, Korean and Japanese automakers could be hit hard in emerging markets.
An industry source said, "South Korea’s auto industry has an edge in automation at assembly plants, but in the EV era, when batteries account for one-third of production costs, it is difficult to secure price competitiveness with robot numbers alone." The source added, "The key is not who assembles cars more efficiently, but who can operate the entire supply chain, including batteries and materials, at lower cost."
[email protected] Kim Hak-jae Reporter