Battery prices passed a key milestone by falling nearly 10% in August. Energy analysts consider the decline a “tipping point” in the world to drive the transition to electric vehicles.
The price of lithium-ion battery cells, which power everything from smartphones to the International Space Station, fell below $100 per kilowatt hour (kWh) last month; a drop of 33% since March 2022 and a monthly drop of 8.7%.
Benchmark Mineral Intelligence, the energy analysis firm that compiled the figures, said battery pack prices must reach $100/kWh for electric vehicles to reach price parity with fossil fuel-burning vehicles.
“Declining cell prices could allow manufacturers to sell electric vehicles on the mass market at prices comparable to internal combustion engine vehicles, with the same margin. “It would improve the attractiveness of the transition to electric vehicles for both consumers and automakers,” explained Benchmark analyst Evan Hartley.
“The drop in cell prices is of particular concern for companies investing in cell production outside of China, especially when there are already concerns about the profitability of factories in regions such as Europe.”
The report adds that the price drop could also have implications for other technologies, including solar and wind installations that need to store excess energy during periods of overproduction.
“The energy and transportation revolution continues,” energy analyst Gerard Reid wrote on LinkedIn.
“Lithium battery cell prices are now below US$100 per kWh, down 80% in a decade. “In the future we will see even lower costs and better performance, which is why the death of the internal combustion engine is coming.”
(Benchmark)
The drop in prices has been attributed to declining raw material costs; Lithium prices have more than halved since the beginning of 2023.
The price could continue to fall following the discovery of huge lithium deposits in recent months, particularly within an extinct supervolcano on the border of Nevada and Oregon.
The McDermitt caldera could contain up to 120 million tons of lithium, according to recent estimates by geologists, which could meet global demand for batteries for decades.
Translation of Michelle Padilla
