Thanks to a variety of factors, lithium-ion battery packs are at record low prices. After dropping 14%, they are down to $139/kWh. The steep price drop and record low average price come on the heels of price increases in 2022 that had brought battery prices back to 2020 levels. The world changes fast.
Just looking at EV lithium-ion batteries, the average price for packs was down to $128/kWh, and for cells it was down to $89/kWh.
Unsurprisingly, average battery pack prices were lower in China ($126/kWh) than in the US or Europe. “Packs in the US and Europe were 11% and 20% higher, respectively. Higher prices reflect the relative immaturity of these markets, higher production costs, lower volumes, and the diverse range of applications. There was also intense price competition domestically in China this year as battery manufacturers ramped up production capacity aiming to grab a share of the growing battery demand.”
March Into Lithium-Iron-Phosphate Batteries
As we’ve been documenting for years, the electric vehicle industry has shifted more and more to low-cost
lithium-iron-phosphate (LFP) batteries — which don’t have as strong of performance as some other EV battery chemistries, but which have gotten good enough energy density and power density at low cost to be the most competitive options in many markets.
“These packs and cells had the lowest global weighted-average prices, at $130/kWh and $95/kWh, respectively. This is the first year that BNEF’s analysis found LFP average cell prices falling below $100/kWh. On average, LFP cells were 32% cheaper than lithium nickel manganese cobalt oxide (NMC) cells in 2023,” BNEF writes.
Naturally, the forecast is that the learning curve continues, economies of scale grow, R&D pays off, and lithium-ion battery prices continue to drop. BNEF is expecting record low prices again in 2024, and then record low prices in 2025, and so on and so on. In particular, in 2023 dollars, BNEF is projecting the following battery pack price averages:
- $133/kWh in 2024
- $113/kWh in 2025
- $80/kWh in 2030
At 57.5% the cost of batteries in 2023, one would expect hyper-competitive EV prices in 2030. Disruption mode. And recall that Europe is already at
23% plugin vehicle share (16% BEV share), China is already at
36% plugin vehicle share (24% BEV share), and the world is at
17% plugin vehicle share (12% BEV share). Where will we be in 2030?
