Battery prices have dropped over the years, and they seem to keep falling at an impressive rate, although there may be spikes. While an increase in demand for something, a shortage or difficulty in finding and/or producing something usually leads to an increase in prices, at least in the long term this is not the case with EV batteries.
In the midst of a global pandemic, a global chip shortage, severe shortages of many products, and rising prices on almost everything, electric vehicles are taking hold, and prices of lithium-ion battery packs and cells are falling. The decline in battery prices is due to increased exploration and extraction of key raw materials, growth in battery manufacturers and their production efforts, subsidies, and many other factors.
According to Bloomberg New Energy Finance’s annual battery survey, annual battery pack prices have fallen by about 6 percent from 2020 to 2021. Back in 2010, lithium-ion battery pack prices averaged $1,200 per kWh. Today, they’re down 89 percent, averaging just $132 per kWh. Just a year ago, the pack cost $140 per kWh.
Pack prices were averaged from several different uses, such as passenger electric cars, buses, and battery storage projects. If we just take the EV battery pack apart, the cost per kWh comes out to $118. Furthermore, breaking it down to the sell level only results in an average price of $97 per kWh. Green Car Congress says this shows that 82 percent of total EV battery pack costs are related to the cell alone.
The publication notes that pack prices were the lowest in China at $111 per kWh. In Europe, prices are 60 percent higher. Meanwhile, prices are 40 percent higher in the US than in China.
While this is all positive news, the survey suggests that there may be a marginal increase in prices. In fact, although prices are down for the whole of 2021, prices are rising in the second half of the year.
“Although battery prices fell throughout 2021, prices are rising in the second half of the year. We estimate the average NMC (811) cell price is $10/kWh higher in the fourth quarter. Three months out of the year.. “