The price of batteries for electric cars (and others) has been falling for years and is expected to continue to fall. But for how long and up to what value? A recent report fromID TechExtitled in French “Li-ion battery market 2025-2035. Technologies, players, applications, prospects and forecasts” paints a picture of what awaits us.
Apparently, prices will fall within a few years, even if there are some unknowns and especially some variables that could influence the long-term trend. Let’s try to see it more clearly.
The fundamental role of raw materials
Firstly, the research highlights that it is the cost of raw materials such as nickel, cobalt and graphite that will play a key role in defining the overall cost structure of lithium-ion batteries. . These are essential materials for cells and their market dynamics directly influence final prices.
A site for extracting certain raw materials for batteries
In this regard, lithium peaked in 2022 due to a sharp increase in demand, and in that year, contrary to the long-term trend, the cost of batteries even increased. But since 2023, prices have started to fall again, and in 2024, they continue in this direction. Suffice it to say that while two years ago the cost of raw materials was $60 per kWh for a battery, it is only $20 per kWh today.
New chemical compositions are emerging
New technologies also influence the cost of batteries. Lithium-iron-phosphate batteries, for example, are developing rapidly. In fact, they spread more quickly than expected. In China, however, there has been an overproduction of cathodes for LFP batteries, prompting manufacturers to cut prices and margins to stimulate demand.
Tesla Model 3 LFP batteries
This situation has benefited consumers, but it complicates life for the entire supply chain, which has to work in difficult and unprofitable conditions. Help comes in the form of government policies which, overall, with all the necessary differences, continue to support electric mobility and energy production from renewable sources, which inherently requires storage systems. These policies, combined with the growing popularity of electric vehicles, will allow the battery market to grow, even if they cost less and less.
It will reach $80/kWh
Speaking of price. According to a study by Fenice Energythe price of batteries in 2023 was $139 per kWh. In 2024, it is expected to reach $133 per kWh and in 2025, $113 per kWh. In 2030, however, it will not exceed $80 per kWh. This is due to better economies of scale and the arrival of new technologies, which will make production processes more efficient and more environmentally friendly.
- 2023 : 139 $/kWh
- 2024 : 133 $/kWh
- 2025 : 113 $/kWh
- 2030 : 80 $/kWh
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