Global EV battery prices declining more rapidly than expected

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Projected EV Battery Prices

A recent report from Ford Authority suggests that global EV battery prices are declining at a faster rate than initially expected, driven by a decrease in the prices of battery metals. According to this new research, it is now projected that global EV battery prices will decrease by 40 percent by 2025 compared to 2022, equating to $99 per kilowatt-hour (kWh) of storage capacity. Goldman Sachs had previously anticipated a 33 percent drop over the same period.

Approximately half of this price decline is expected to result from the rapid reduction in the costs of raw materials crucial for EV battery construction, including lithium, nickel, and cobalt. This is anticipated to lead to an average annual reduction of 11 percent in battery pack prices from 2023 to 2030.

Projections for EV Cost Parity

This development is positive news for automakers and stakeholders heavily invested in EVs, as it implies that all-electric vehicles are now forecasted to achieve cost parity with internal combustion engine (ICE) vehicles by the mid-2020s, without factoring in any subsidies. This shift is anticipated to boost EV adoption, with Goldman Sachs predicting that EV penetration worldwide will reach somewhere between 47-63 percent by 2030.

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Battery Prices