Electric Vehicle Prices on Par with Gasoline-Prices Falling


September 25, CNET Japan reports that the price of lithium-ion batteries fell nearly 10% in August. This is likely to bring the price of electric vehicles (EVs) on par with that of gasoline-powered cars.  Until now, EVs have required a large initial investment compared to gasoline-powered cars, largely due to the price of batteries. However, according to energy pricing analysis firm Benchmark Mineral Intelligence, the average price of a battery fell to $98.2 per kilowatt-hour in August, the first time it has fallen below $100 in two years.

Benchmark explained that to bring the price of EVs on par with gasoline-powered cars, the battery package price would need to fall below $100 per kilowatt-hour.  The company’s analyst Evan Hartley said in a statement. If cell prices fall, [OEMs] will be able to sell EVs at prices comparable to gasoline cars without cutting into margins, which will increase interest in switching to EVs for both consumers and automakers.”

About a decade ago, the average price of a lithium-ion battery was $668 per kilowatt-hour (about $99,000); by March 2022, it had dropped to $146.40 (about $21,700), and the average price in August 2023 dropped another 33% from there. According to market research firm TrendForce, “The price decline will (and should) continue through the end of the year.

Experts cite a number of factors for the price decline, including government subsidies, increased competition, improvements in battery chemistry (the combination of electrodes and electrolyte types used in batteries), and lower battery raw material prices. Lithium prices have fallen 58% since early 2023, and nickel and cobalt prices have dropped considerably as well.

In addition, demand growth for EVs has been below industry expectations: according to Cox Automotive, U.S. automakers had about 100 days of EV inventory in June, nearly double the industry average.

Rechargeable lithium-ion batteries are used not only in EVs, but everywhere from smartphones and laptops to electric toothpaste and e-cigarettes. They are also used in solar power storage batteries, and if prices come down, consumer interest in combining solar panels and batteries in their homes may increase.

Read the full article here.


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