Battery costs for electric cars are rising, price parity now further away

The price of the lithium-ion batteries vital to the electrification of motoring has risen for the first time in more than a decade.

Battery prices fell consistently from 2010 – from more than $US1000 per kilowatt hour in 2010 to $US141 per kWh last year – but now a special report by news agency Bloomberg has highlighted the first significant increase through 2022.

Its annual BloombergNEF lithium-ion battery price survey reports a seven per cent increase in the price of battery packs this year.

This was partly triggered by rising worldwide battery demand but also by the cost of raw materials.

“There are several factors driving the uptick, but the single most important one is rising costs for materials including cobalt, nickel and lithium,” said Bloomberg.

“While prices for nickel and cobalt have come down in recent months, and lithium may be about to turn, each of these are still higher than they have been in previous years.”

It also reported the rising popularity of lithium ion phosphate (LFP) batteries, which Bloomberg said could account for 40 per cent of electric vehicle sales globally this year.

They are gaining rapidly in popularity because they do not contain nickel or cobalt.

Research for the annual survey included buyers and sellers of lithium-ion batteries used for passenger vehicles, commercial vehicles, buses and stationary storage.

The global average price for the battery pack in an electric passenger vehicle is $US138 per kWh, with the lowest price at $US131 for electric buses and commercial vehicles in China.

Battery packs were also cheapest in China, with prices rising by 24 per cent in the USA and 33 per cent in Europe.

Bloomberg is forecasting lithium-ion battery prices to remain high in 2023, with a potential fall in 2024 thanks to increased supply of raw materials and the arrival of next-generation technologies and pack design.