Lithium-Ion Battery Pack Prices Hit Record Low of $115/kWh

The cost of lithium-ion battery packs has reached an all-time low, dropping by 20% from 2023 to $115/kWh, as reported by BloombergNEF (BNEF). This marks the steepest annual decline since 2017.

Several factors have contributed to this significant price reduction. These include an oversupply in cell manufacturing, economies of scale, reduced costs for raw materials and components, the growing use of lithium-iron-phosphate (LFP) batteries, and slower growth in electric vehicle sales.

Globally, battery-cell manufacturing capacity now stands at 3.1 TWh, more than 2.5 times the annual demand for lithium-ion batteries in 2024, according to BNEF. This surplus has intensified competition among manufacturers."The drop in cell prices has outpaced the decrease in battery metal costs, putting pressure on manufacturers' profit margins. Smaller manufacturers, in particular, are under strain to reduce prices and maintain their market share," explained Evelina Stoikou, head of BNEF’s battery technology team and lead author of the analysis.

Price reductions are expected to continue over the coming decade, driven by further advancements in manufacturing efficiency and economies of scale.

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