EV Battery Cell & Pack Prices Dropping At Surprising Rate

Battery prices have dropped dramatically over the years, and though there may be some fluctuations it appears that they will continue to do so at a rapid pace.

Usually, an increase in demand for something, in addition to scarcity or difficulty in finding and/or producing it, usually results in a price increase, this is not the case with EV batteries, at least not in the long run.

EV and EV Batteries

Electric vehicles are catching on, and lithium-ion battery pack and cell prices are declining, despite a global pandemic, a global semiconductor shortage, significant shortages of numerous things, and increased prices on practically everything. A rise in the search and extraction of important raw materials, growth in the number of battery makers and their manufacturing efforts, subsidies by the governments, and a variety of other variables have all contributed to the decline in battery prices.

Facts and Figures

According to Bloomberg New Energy Finance’s annual battery survey, annual battery pack prices fell 6% from 2020 to 2021. In 2010, the average cost of a lithium-ion battery pack was $1,200 per kWh. They’ve dropped 89% to an average of $132 per kWh today.

The pack prices were calculated using data from a variety of sources, including passenger electric vehicles, buses, and battery storage projects. If we only consider EV battery packs, the price per kWh is $118. Furthermore, if you cut it down to the cell level, the average price is only $97 per kWh. According to the Green Car Congress, the cells alone account for 82% of the entire cost of an EV battery pack.

The Assumptions and Predictions

According to the report, China’s pack costs were the lowest in the world, at just $111 per kWh. Prices in Europe are 60% higher. Meanwhile, costs in the United States are 40% more than in China. By 2024, according to BNEF, average pack prices will fall below $100 per kWh, allowing automakers to produce electric cars at parity with gasoline vehicles. 

While all of this is good news, the study shows that prices may rise slightly. In reality, despite the fact that prices are down for the entire year of 2021, prices are rising in the second half of the year.

RM Scarcity & Price Shortage

However, according to BNEF, supply-chain concerns have pushed up raw material prices for the lower-cost lithium iron phosphate (LFP) chemistry, which is now favoured by a number of significant Chinese automakers and battery suppliers and is being gradually embraced by Tesla. According to the research, Chinese LFP cell producers have boosted their pricing by 10% to 20% since September.

“Although battery prices fell overall across 2021, in the second half of the year prices have been rising. We estimate that on average the price of an NMC (811) cell is $10/kWh higher in the fourth quarter than it was in the first three months of the year …”

-Head of metals and mining at BloombergNEF Kwasi Ampofo

For example, let’s take the case of Nickel.

The Problem of Nickel

According to a new analysis from the Norwegian consultant Rystad Energy, global nickel demand could outpace supply over the next several years, thereby limiting EV battery supplies.

The analysis estimates that annual worldwide nickel consumption will climb from 2.5 million metric tonnes (2.7 million tonnes) to 3.4 million metric tonnes (3.7 million tonnes) by 2024, exceeding available supplies and the disparity would continue to increase after that.

This could be especially tough for the battery business because, unlike other battery raw materials, nickel is also used by other significant industries. In 2020, the stainless steel industry accounted for about 70% of global demand, while the battery industry accounted for less than 10% of demand.


With automakers ramping up EV production, demand for nickel and other raw materials to be used in batteries is expected to accelerate much more quickly than other industries, which are also seeing some growth in their demand. The end result could be supply headaches and higher battery costs for automakers but not for a long period of time. Because, the industry is actively looking for other sources of Nickel and raw materials and trying to replace the scarce materials with abundantly available ones.