Electric cars: battery prices no longer fall

There was no miracle, as predicted in the face of rising raw material and energy costs, the price of batteries for electric vehicles has stopped falling this year. According to the latest study by BloombergNEF, which is a reference on the subject, it has even increased by 7% compared to 2021, whereas it had been falling continuously since the beginning of the last decade, thanks to technological progress and the effects of scale linked to increasing volumes.
The cost parity between electric cars and combustion engines is therefore moving further away. Experts commonly consider that it will be achieved if the price of batteries falls below the fateful threshold of 100 dollars (95 euros) per kilowatt-hour (the battery represents about 40% of the cost of an electric car).

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"Unforeseen volatility

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Until then, the fall had been spectacular: from 1,306 dollars/KWh in 2010, the average price of lithium-ion batteries worldwide fell to 141 dollars/KWh last year... but it has now risen to 151 dollars/KWh in 2022. This trend reversal is linked to the price of the cells, which represent 80% of the cost of the battery. The cost of the other components of the battery pack (the container, the energy or heat management system, the wiring, etc.) has continued to fall. In 2022, "raw materials have soared, inflation has reached unprecedented levels, and geopolitical tensions with Russia have created unforeseen volatility," the authors of the report point out.

According to BNEF, lithium prices have risen by 157% over the past 12 months, nickel prices have risen by 42% since January 2021, and cobalt prices almost doubled between January 2021 and April 2022, before falling back by 37%. This will increase the price of NMC (nickel manganese cobalt) batteries, which still account for the majority of lithium-ion batteries sold this year.

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‍Chemistry without cobalt or nickel

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Several manufacturers, notably the Chinese BYD and CATL, have already turned massively to another chemistry, LFP (lithium iron phosphate), which uses neither nickel nor cobalt: the average price of LFP batteries ($135/KWh) is significantly lower than that of NMC batteries ($184/KWh). This technology has also been adopted by Tesla, and is being used by more and more car manufacturers (VW).

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Bloomberg NEF now expects the $100/KWH threshold to be reached in 2026, not 2024

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With commodity prices calming in recent months, BNEF expects battery costs to remain at $152/KWh next year. However, the firm has revised its forecasts for the date when the famous 100 dollars/KWH will be reached: it is now counting on 2026, not 2024.

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