If you drove an EV back in 2010, it’s likely that you paid an average of about $1,100 per kilowatt-hour for your battery pack. By the end of 2019 this figure had fallen a full 87%, to $156 per kWh. According to BloombergNEF’s 2019 Battery Price Survey, the average price by 2023 will be approximately $100/kWh, and below that by the following year, when aggregate demand is expected to exceed 2 TWh. At this point, EVs are expected to finally reach price parity with combustion-engine creations. These dramatic cost reductions can be chalked up to a multitude of factors, including the steady rise of high-energy-density cathodes, growing order sizes, and the overall expansion of EV sales.
As battery prices fall, more companies and individuals are going electric. This is good for more than our collective wallets, as wider commercialization leads to helpful differentiation in cell specifications. For instance, a driver concerned with a standard commute may focus solely on the cost efficiency aspect, whereas high-end or commercial buyers may lean more toward facets like cycle life. Falling prices in the new Roaring 20s will stem from innovative pack designs, evolution of supply chains, and diminished manufacturing expenses. As demand for EVs rises in Europe and China, companies will cut transport and import costs by building manufacturing plants within the demand regions.
Survey author James Frith, a Senior Energy Storage Analyst for BNEF, said, “According to our forecasts, by 2030 the battery market will be worth $116 billion annually, and this doesn’t include investment in the supply chain. However, as cell and pack prices are falling, purchasers will get more value for their money than they do today.” As automakers begin to home in on their own renditions of EV models featuring tailored thermal management systems, battery pack designs will be standardized, simplified, and streamlined at both the design and economic levels, making for reduced requirements in module housing and, in turn, reduced environmental impact. Bloomberg NEF envisions prices falling to $61/kWh by 2030, but this may depend on the development of emerging technologies such as silicon and lithium anodes, new cathode materials and solid-state cells.