A recent BloombergNEF study reveals a significant drop in lithium-ion battery prices, the steepest decline in seven years.
The factors contributing to the substantial drop in lithium-ion battery prices over the past year include an abundant supply of battery cells from multiple providers and a decrease in the cost of raw materials and battery components.
Batteries are the most critical and expensive component in electric vehicles. With the current downward trend in lithium-ion battery prices, consumers can expect a significant drop in electric car prices, potentially reaching parity with, or even becoming cheaper than, gasoline-powered vehicles.
Currently, the average cost of a battery pack for an electric car is $115 per kWh, a 20% decrease from 2023. If this trend continues, by the end of 2025, electric vehicle battery prices are expected to fall below $100 per kWh. This makes it entirely possible for electric car prices to match those of gasoline-powered cars by 2026.
In reality, battery prices in China have already reached this level. However, achieving these prices in other parts of the world will take some time and may require government subsidies.
