EV Battery Prices Continue Downward Trend
Photo courtesy Mercedes-Benz
CAMBRIDGE, England—According to a recent study conducted by ID TechEx, the lithium-ion battery market will surpass $400 billion by 2035. However, the battery supply chain over the next decade will be driven by the cost of raw materials such as cobalt, graphite, lithium and nickel.
“During 2022, lithium saw unprecedented price spikes due to a strong increase in demand, while nickel and cobalt also faced supply chain pressures, contributing to rising costs,” says Alex Holland, Ph.D., research director at IDTechEx. “In 2022, the cost of lithium, nickel and cobalt alone could have contributed up to $60 per kilowatt hour (kWh) o the cost of an NMC 811 battery. However, 2023 saw a decline in prices, with the cost of those same raw materials contributing only around $20 per kWh during 2024.”
Despite the challenges ahead, Holland believes that the medium-long-term outlook for the lithium-ion battery market remains positive, with considerable growth opportunities across the supply chain. “There continues to be broad policy support for both EVs and renewable deployment, both of which rely heavily on lithium-ion battery technology,” he explains.
Policy and regulation, including the U.S. Inflation Reduction Act and emissions performance standards in Europe, will continue to create stable demand for EVs outside of China, while increasing deployment of renewable power will continue to drive the adoption of energy and battery storage systems. Technological innovation is also improving battery performance.
“Advancements from solid-state batteries, silicon anodes, optimized cell designs and more advanced battery management systems can offer safer, more energy-dense, faster charging and longer-lasting batteries,” says Holland. “This will help to further improve the value proposition of battery-powered EVs and stationary energy storage systems….
“A combination of policy and technological advancement will also play a role in creating stable demand, diversifying supply chains and material requirements, and in lowering the costs of higher energy density and performance battery designs,” claims Holland.
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