EV Batteries Got 20% Cheaper Last Year

[Biker16]

EV Batteries Got 20% Cheaper Last Year

 

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The good news: Cheaper batteries mean cheaper EVs. The bad news: China's battery costs are still dropping faster than ours.

The war for a zero-emission future of transportation is really a war for batteries. If battery prices—the biggest single cost of any electric vehicle—remain high, then EVs will stay expensive. But if batteries can be made or secured cheaply and locally, prices will decline.

Tesla figured this out early on with its Gigafactory in Nevada. It's also why automakers like General Motors, Toyota and Ford are planning battery plants of their own—to varying degrees of success thus far.
 

But as every automaker, battery supplier and energy provider races toward that future, here's some good news: global prices for lithium-ion battery packs fell 20% in 2024, according to a new study from the International Energy Agency (IEA). That's the biggest single price drop since 2017. 

 

You can thank increased competition, more production and growing demand for this situation. "Lithium prices, in particular, dropped nearly 20% in 2024, reaching similar prices to those at the end of 2015, despite lithium demand in 2024 being about six times bigger than in 2015," the report said.

The low prices of critical minerals are due to current surpluses, which is good news for EV costs in the near-term but could lead to under-investment in the future. 

This is an Interesting note
 

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Interestingly, that study also notes that contrary to what you may think, hybrid batteries are more expensive than EV batteries, despite being significantly smaller. "The price of such components is spread across fewer battery cells, increasing the price per kilowatt-hour," the study said. "In 2024, the average price of a 20 kWh PHEV battery pack—roughly the global sales-weighted average for standard plug-in hybrids—was about the same as a 65 kWh BEV battery pack."