The Department of Energy's (DOE's) Vehicle Technologies Office estimates the cost of an electric vehicle lithium-ion battery pack declined 89% between 2008 and 2022 (using 2022 constant dollars). The 2022 estimate is $153/kWh on a usable-energy basis for production at scale of at least 100,000 units Contact online >>
The Department of Energy''s (DOE''s) Vehicle Technologies Office estimates the cost of an electric vehicle lithium-ion battery pack declined 89% between 2008 and 2022 (using 2022 constant dollars). The 2022 estimate is $153/kWh on a usable-energy basis for production at scale of at least 100,000 units per year. That compares to $1,355/kWh in 2008. The decline in cost is due to improvements in battery technologies and chemistries, and an increase in manufacturing volume.
2017 – Steven Boyd, DOE, Vehicle Technologies Office, 2017 Annual Merit Review,Batteries and Electrification R&D Overview, June 18, 2018, PowerPoint presentation, p. 7.
2016 – David Howell, DOE, Vehicle Technologies Office, 2017 Annual Merit Review,Electrochemical Energy Storage R&D Overview, June 20, 2017, PowerPoint presentation, p. 6.
2008–2015 – National Academies of Sciences, Engineering, and Medicine 2017.Review of the Research Program of the U.S. DRIVE Partnership: Fifth Report. Washington, DC: The National Academies Press, p. 173.
Truly affordable electric cars may be even farther away than we all thought. After dropping for years, the price of lithium-ion batteries — a costly and crucial component in electric vehicles — rose in 2022, according to a study from BloombergNEF released Tuesday.
The going price for the battery packs used in EVs and energy storage projects jumped to $151 per kilowatt-hour in 2022, a 7% increase over 2021. It''s the first year-over-year cost increase BloombergNEF has seen since it started tracking the market for lithium-ion batteries in 2010.
As electric cars have graduated from niche to mainstream, battery costs have plummeted. ($1,306/kWh in 2010, according to BloombergNEF.) And those steadily declining prices held the promise that someday EVs would cost roughly the same as combustion-engine cars and trucks.
"We''ve seen cost inflation for all input costs for batteries," Yayoi Sekine, head of energy storage research at BloombergNEF, told Insider. "It''ll definitely translate to higher costs of EVs. We''ve already seen EV prices go up."
Lithium, she said, is 5-6 times costlier than it was last year, partially due to booming demand. (Global demand for battery capacity has roughly doubled annually in recent years.) Nickel got 2-3 times pricier amid the war in Ukraine before easing somewhat, she added, since Russia is a key supplier.
Americans paid an average of $64,249 for a new EV in October, according to Kelley Blue Book. The average transaction price for all new cars was just over $48,000. According to a recent Ipsos poll, 59% of Americans won''t consider an EV in the next two years due to the high upfront cost.
Automakers promise that cheaper EVs are coming. Chevrolet plans to launch the Equinox SUV in 2023 with a starting price around $30,000, and a model near that price point has long been a goal of Tesla CEO Elon Musk.
BloombergNEF expects battery prices to rise slightly in 2023 before continuing their downward trend in 2024 as lithium mining and processing ramps up. Average pack prices should drop below $100/kWh — the group''s rough threshold for price parity between electric and gas-powered cars — by 2026, two years later than it previously projected.
The price of lithium-ion batteries rose for the first time in more than a decade this year, with surging raw material costs expected to challenge the car industry''s efforts to turn electric vehicles into a mass-market product.
Soaring prices of battery metals such as lithium, cobalt and nickel and higher component costs pushed battery pack prices up to $151 per kilowatt hour, a 7 per cent rise compared with a year ago and the first increase since BloombergNEF began its annual survey in 2010.
However, lithium prices have increased 10-fold since the start of 2021 and nickel is up 75 per cent, while cobalt prices have been more than double their 2020 average this year.
As a result, BloombergNEF forecasts that the $100 per kWh level will be reached by 2026, two years later than previously expected. This will "negatively impact the ability for automakers to produce and sell mass-market EVs in areas without subsidies", it said.
It added that the higher costs could also be problematic for the economics of battery energy storage projects that are vital to stabilising the grid as intermittent renewable power grows.
The rise in battery pack prices would have been even higher if car companies and cell manufacturers in the Chinese market had not switched to cheaper lithium iron phosphate (LFP) batteries, which do not use cobalt and nickel but have a shorter range.
In 2022, there were 603 gigawatt hours of demand for lithium-ion batteries, almost double the level of the previous year. Supply chains are struggling to keep up.
Lithium-ion battery pack prices vary significantly in different regions. In China they cost $127 per kWh on average, while in the US and Europe prices are 24 and 33 per cent higher respectively. The difference is explained by higher production costs in less developed western markets, as well as their preference for longer-range batteries that use nickel and cobalt.
Evelina Stoikou, an energy storage associate at BloombergNEF, said that the rising raw material and components costs had pushed carmakers to take action to secure resources and bring costs down.
"Amidst these price increases for battery metals, large battery manufacturers and automakers have turned to more aggressive strategies to hedge against volatility, including direct investments in mining and refining projects," she said.
There is significant uncertainty about when battery metal prices will ease. The world''s largest lithium producers have warned about the difficulties of increasing production to cope with rocketing demand, while the US, Europe and other countries are making efforts to reduce their dependence on China.
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