Significant Drop in Lithium-Ion Battery Pack Prices to $115 per Kilowatt-Hour Since 2017
A recent report by BloombergNEF reveals that lithium-ion battery pack prices have seen their largest drop since 2017, falling to a record low of $115 per kilowatt-hour. This significant price reduction of 20% from 2023 is attributed to various factors such as cell manufacturing overcapacity, economies of scale, low metal and component prices, and the adoption of lower-cost lithium-iron-phosphate batteries.
With an excess of battery-cell manufacturing capacity globally, the industry is facing fierce competition, particularly in the electric vehicle (EV) and stationary storage sectors. While the EV market has grown more slowly than in past years, the stationary storage market is booming, especially in China. This growth has led to an increase in demand but a decrease in margins for battery manufacturers.
On average, battery pack prices for battery electric vehicles (BEVs) have dropped to $97 per kilowatt-hour, dipping below the $100 threshold for the first time. Prices are lowest in China at $94/kWh, with the US and Europe lagging behind due to market maturity and production costs. Despite the decreasing prices, battery manufacturers are facing challenges such as geopolitical tensions, tariffs, and low prices for raw materials.
Looking forward, BNEF predicts further reductions in battery pack prices in 2025, with continued investments in research and development, manufacturing improvements, and capacity expansion. Technological advancements like silicon and lithium metal anodes, solid-state electrolytes, and new cathode materials are expected to drive further price reductions in the coming years.
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