January 7, 2021: The price of lithium batteries dropped to its lowest ever in 2020, a report by BloombergNEF claimed on December 16, citing a 13% drop on 2019 figures.
For the first time, BNEF said, battery packs were selling for less than $100/kWh for e-buses in China, although the volume-weighted average price for e-buses there was slightly higher, at $105/kWh.
The market average was $137/kWh hour in 2020, which means that over 10 years, the price per kilowatt hour has dropped by 87% in real terms from $1,100 in 2010.
In battery electric vehicles, the lower $126/kWh pack price means that the battery portion of the total cost of a vehicle was 21%, dropping to $101/kWh by 2023, BNEF’s 2020 Battery Price Survey said.
“It is at around this price point that automakers should be able to produce and sell mass market EVs at the same price (and with the same margin) as comparable internal combustion vehicles in some markets,” said BNEF.
“This assumes no subsidies are available, but actual pricing strategies will vary by automaker and geography.”
BNEF also said that new cathode chemistries and falling manufacturing costs would drive prices down in the near term.
Calling the price drop a ‘historic milestone’, James Frith, BNEF head of energy storage research and lead author of the report, said within a few years the average price in the industry as a whole would pass this point.
“What’s more, our analysis shows that even if prices for raw materials were to return to the highs seen in 2018, it would only delay average prices reaching $100/kWh by two years — rather than completely derailing the industry,” he said.
“The industry is becoming increasingly resilient to changing raw material prices, with leading battery manufacturers moving up the value chain and investing in cathode production or even mines.”