EV Battery Cost Plummets To $132/ kWh But Things Could Get Pricey Soon

The cost of batteries for electric cars has plummeted to an all-time low of $132 per kWh, but this all-time low could be the start of a plateau as traditional carmakers get into the EV space and general material shortage could potentially drive up the costs again. Many experts believe that for EVs to reach cost parity with petrol or diesel cars, EV batteries have to cost $100 per kWh. Already, the cost of batteries for electric buses has fallen to $100 per kWh which happened last year.

"Lithium-ion battery pack prices, which were above $1,200 per kilowatt-hour in 2010, have fallen 89% in real terms to $132/kWh in 2021. This is a 6% drop from $140/kWh in 2020. Continuing cost reductions bode well for the future of electric vehicles, which rely on lithium-ion technology," revealed the BloombergNEF report.

All major carmaker's have invested in their own battery platform

This number has further come down from what the 2020 levels were at $137 per kWh. In 2022, it has been reported the decline in the cost of electric car batteries will slow down or reverse.

"However, higher raw material prices mean that in the near-term, average pack prices could rise to $135/kWh in 2022 in nominal terms. In the absence of other improvements that can mitigate this impact, this could mean that the point at which prices fall below $100/kWh could be pushed back by two years. This would impact EV affordability or manufacturers' margins and could hurt the economics of energy storage projects," explained the report.

Just, for example, the cost of nickel alone has increased by 24 percent this year and that's been one of the biggest reasons for manufacturers to shift towards LFP batteries.