The price of batteries for electric cars has been falling for several years, and this trend is expected to continue. However, some uncertainties remain as to the duration of this decline and the levels that prices will reach, even if a strong downward trend is still emerging.
A study by the organization ID TechEx, soberly named “Li-ion Battery Market 2025-2035. Technologies, Players, Applications, Outlooks and Forecasts”gives an overview of the evolution of the prices of these accumulators and, consequently, those of electric cars in the medium term.
The influence of the cost of raw materials
The study highlights that the cost of raw materials such as nickel, cobalt and graphite will play a key role in the cost structure of lithium-ion batteries. These materials are essential to the manufacturing of battery cells, and their dynamics directly influence final prices.
In 2022, the price of lithium reached a peak due to a sharp increase in demand. Contrary to the long-term trend, this caused battery costs to rise that year. However, in 2023, prices started to fall again, and this trend is expected to continue in 2024. For example, if in 2022 the cost of raw materials represented around $60 per kWh for a battery, this figure has now fallen to less than $20 per kWh.
The emergence of new technologies
In addition to raw materials, new technologies also influence the cost of batteries. Lithium-iron-phosphate (LFP) batteries are starting to become more popular, with adoption ultimately faster than expected. China even experienced a phase of overproduction of cathodes for these batteries, which led manufacturers to reduce their prices to stimulate demand.
This benefits customers through lower prices, but it puts pressure on the entire supply chain to adapt to less profitable production conditions. For the moment, governments continue to support, in the majority of cases, the advent of electric mobility. The market can thus continue to grow, perhaps sometimes a little too much, but with the final objective of arriving at lower prices in the eyes of customers.
Constantly decreasing prices
According to another study, this time carried out by Fenice Energy, the price of batteries in 2023 was $139 per kWh. In 2024, it should reach 133 dollars per kWh, then 113 dollars per kWh in 2025. By 2030, the price of batteries could drop to 80 dollars per kWh. This decline can be explained by economies of scale and the arrival of new technologies which will make production processes more efficient and ecological.
Logically, and as is currently the case in China, even if it is much less palpable in Europe, the price of electric cars is falling and some products even achieve balance, or are sometimes even less expensive than their thermal and hybrid equivalents.
To see if this will also be the case soon in Europe.
