Summary
EV battery prices are falling and are predicted to decrease further over the next two years according to a Goldman Sachs report.
Global average battery prices have decreased from $153 per kwh in 2022 to $149 in 2023, with a forecast of dropping to $80 per kwh by 2026.
Factors contributing to lower battery prices include technological advancements such as larger cells and cell-to-pack technology, as well as decreasing raw material prices like lithium and cobalt.
Another report from Goldman Sachs predicts a 40% decrease in EV battery costs between 2023 and 2025, potentially boosting EV sales to claim 50% of the U.S. market by 2030.
Despite supply chain issues, EV battery prices have consistently decreased over the past 15 years, with prices dropping 90% since the introduction of the Tesla Roadster.
Article
According to a new report from Goldman Sachs, EV battery prices have been falling and are expected to decline even more steeply over the next two years. The global average battery price on the pack level decreased from $153 per kwh in 2022 to $149 in 2023, with a predicted drop to $80 per kwh by 2026. This significant decrease in price could help EVs achieve price parity with gasoline cars, making them more accessible and appealing to consumers.
Analysts attribute the decreasing battery prices to two main factors. One factor is technological advancements, such as larger cells and cell-to-pack tech, which can lower costs and increase energy density by up to 30%. The other factor is a decline in the prices of raw materials like lithium and cobalt, which have contributed to soaring EV battery costs. This trend is expected to continue through at least 2030, representing about 40% of anticipated battery cost reductions, according to the report.
Tesla has been a key player in driving down EV battery costs, with the company producing its own large-format 4680 cells. However, they have faced challenges in keeping manufacturing costs of these cells down. The report also compares 4680 cells to 2170 cells produced by Panasonic, highlighting the importance of technological advancements in reducing battery costs and increasing energy efficiency.
Another report from Goldman Sachs earlier this year predicted a 40% drop in EV battery costs between 2023 and 2025, which could potentially boost sales and allow EVs to claim 50% of the U.S. market by 2030. Despite supply chain issues related to the pandemic, EV battery prices have continued to decrease steadily since the modern EV era began with the introduction of the Tesla Roadster about 15 years ago. Prices have dropped by 90% since that time, according to the U.S. Department of Energy, making EVs more affordable and accessible to a wider range of consumers.
Overall, the forecast for EV battery prices is positive, with continued declines expected over the next few years. Technological advancements and decreases in raw material prices are driving these price reductions, making EVs more competitive with traditional gasoline cars. The potential for EVs to claim a larger market share in the coming years is promising, as consumers are increasingly interested in sustainable and environmentally friendly transportation options. As EV technology continues to evolve and improve, it is likely that prices will continue to fall, making electric vehicles more accessible to a broader range of consumers.
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