According to a new report by energy research firm BloombergNEF, electric cars are getting cheaper and cheaper each passing year. The research firm found that in just two to three years, electric cars are on track to become cheaper than gasoline-powered vehicles.
According to the report, the market average for Lithium-ion batteries will become just $101 per kWh by 2023. This means that the overall price of the electric vehicle will go down, as the most expensive part of these cars is the battery pack itself.
The report states that Lithium-ion battery pack prices were above $1,100 per kilowatt-hour in 2010. However, they have since gone way down in price as much as 89% in real terms to $137/kWh in 2020.
A survey by BNEF’s 2020 Battery Price Survey, which considers passenger EVs, e-buses, commercial EVs, and stationary storage, foretells that by 2023 the average pack price for the batteries will be $101/kWh. The report says that “it's at around this price point where automakers should be able to produce and sell mass-market EVs at the same price as internal combustion vehicles in some markets.”
The researchers concluded that the prices of electric cars have dropped considerably this year due to “increasing order sizes, growth in [battery electric vehicle] sales and the introduction of new pack designs,” according to the report. New technologies and falling manufacturing costs, it predicts, could drive prices down even lower.
There’s also the chance that next-generation solid-state batteries “could be manufactured at 40% of the cost of current lithium-ion batteries,” according to the report, “when produced at scale.”
The report further predicts that the average prices of battery packs could become as cheap as just $58 per kWh by 2030 if these new solid-state batteries were to be utilized resulted from lower manufacturing cost.
James Frith, BNEF’s head of energy storage research and lead author of the report, stated: “It is a historic milestone to see pack prices of less than $100/kWh reported. Within just a few years we will see the average price in the industry 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. 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.”