Electrification: First battery price increase in 10 years

Until recently, all manufacturers relied on lower battery costs to make their electric vehicles more affordable. It's a shame that in recent months various adverse factors have driven battery packs into constant price increases. This is confirmed by BloombergNEF in its latest survey, which recorded the first price increase since the beginning of its ratings in 2010 due to the upward trend in raw materials.

The data

Lithium-ion battery prices for all applications have increased to an average of $151 per kilowatt-hour (135.5 EUR/kWh), 7% more by 2021. The increase is even more significant for electric vehicles alone, averaging $138/kWh (EUR 131.17/kWh), up $17% from $118 last year. At the individual cell level, prices are at $115 (109.3 euros), 18.6% more than 97 twelve months ago. BloombergNEF highlights another aspect that is acting as a deterrent, particularly for the future of electric cars. For analysts, growth rates would be even higher if it were not for the combination of two factors. The survey, which already predicted an increase in battery prices last year, also highlights stark differences between the main global regions. In China, where economies of scale are higher and energy costs lower, parcels have reached 127 $/kWh. In the US and Europe, costs are 24% and 33% higher, respectively.

Adverse prospects

The outlook is not rosy, as prices are expected to remain at 2022 and next year's levels. For now, no decline is expected before 2024, unless the mining sector manages to increase mining and refining activities of the benchmark chemical, lithium. According to BloombergNEF, average battery prices should fall below the $100/kWh threshold (considered critical to the cost equation between electric and thermal cars) only in 2026, thus two years behind early projections. All of this risks having a "negative impact on the ability of automakers to produce for the mass market and sell electric vehicles in regions without subsidies or other forms of support."