Battery Pack Prices Fall to an Average of $132/kWh, But Rising
Continuing cost reductions bode well for the future of electric vehicles, which rely on lithium-ion technology. However, the impact of rising commodity prices and increased costs
“The good news is battery prices are now falling rapidly,” Bhandari says. Goldman Sachs Research expects a nearly 40% decline in battery prices between 2023 and 2025, and for EVs to reach breakthrough levels in terms of cost parity (without subsidies) with internal combustion engine cars in some markets next year.
BloombergNEF pointed out that battery production capacity surplus is indicated by the fact that the current 3.1TWh capacity is more than double this year's demand. Regionally, China leads with the lowest average battery pack prices at $94/kWh.
James Frith, BNEF's head of energy storage research and lead author of the report, said: “Although battery prices fell overall across 2021, in the second half of the year prices have been rising.
Lithium-ion pack prices dropped 20% from 2023 to a record low of $115 per kilowatt-hour. BNEF credits factors including cell manufacturing overcapacity, economies of scale, low metal and component prices, adoption of lower-cost lithium-iron-phosphate (LFP) batteries, and a slowdown in electric vehicle sales growth.
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