Summary
- EV battery replacement cost to be cheaper than gas engine repair by 2030
- Projected EV battery prices to reach $80 per kilowatt hour by 2026
- Cost of EV batteries slashed in half in just three years
- Predicted pack prices to be at or under $50 per kilowatt hour
- Prices dropping due to downturn in battery metal prices, benefiting companies and consumers.
Article
A recent study suggests that the cost of replacing an electric vehicle (EV) battery will soon be cheaper than repairing the engine of a gasoline car, which is a common argument used by supporters of combustion engines to discredit the effectiveness of EVs. The study, conducted by Recurrent, predicts that by 2030, the cost of replacing an entire EV battery pack will be less than repairing a gasoline engine.
Goldman Sachs also supports this claim, projecting that by 2026, the cost of EV batteries will reach $80 per kilowatt hour (kWh), which is roughly half of the price in 2023. The report indicates that in just three years, the cost of EV batteries has been cut in half, with further reductions expected in the future. Some estimates even suggest that the cost could drop as low as $32 per kWh, making battery replacement significantly more affordable for consumers.
The projected prices of EV batteries are based on a variety of factors, including the decreasing costs of battery metals like lithium and cobalt. These metals account for nearly 60% of the cost of batteries, and a decline in commodity prices has contributed to the overall reduction in battery costs. This trend is expected to continue, with the price of battery packs potentially dropping to around $50 per kWh, making replacements as affordable as engine repairs for gasoline cars.
The drop in battery costs is good news for both companies and consumers in the EV sector. Companies can use the reduced prices to boost sales and see returns on their investments in EV technology, while consumers can benefit from more affordable battery replacements. This shift is particularly significant as the EV industry is still relatively new and evolving, with potential for further advancements and cost reductions in the coming years.
Overall, the findings of these studies suggest that the cost of replacing an EV battery pack will decrease significantly over the next decade, potentially reaching just 30% of what it was in 2020. This could make EV ownership more appealing to consumers and contribute to the continued growth of the EV market. As battery prices drop and technology improves, the transition to electric vehicles may become even more accessible and cost-effective for drivers worldwide.
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