Li-ion Battery Pack Prices to Fall Below $100/kWh by 2024: BNEF

Dec 6, 2021 11:43 AM ET
  • Lithium-ion battery pack prices, which were above $1,200 per kilowatt-hour in 2010, have fallen 89% in real terms to $132/kWh in 2021.
  • Proceeding cost decreases bode well for the future of electric vehicles, which rely on lithium-ion modern technology.

Lithium-ion battery pack prices, which were above $1,200 per kilowatt-hour in 2010, have fallen 89% in actual terms to $132/kWh in 2021, finds a new report from BloombergNEF (BNEF). This is a 6% drop from $140/kWh in 2020. By 2024, typical pack prices must be below $100/kWh, forecasts the report.

BNEF's 2021 Battery Price Survey discusses that proceeding cost reductions bode well for the future of electric vehicles, which rely on lithium-ion technology. Nonetheless, the influence of rising product prices and increased prices for essential materials such as electrolytes has actually put pressure on the market in the 2nd half of the year.

These prices are an average across multiple battery end-uses, consisting of different sorts of electric vehicles, buses as well as stationary storage projects. For battery electric vehicle (BEV) packs in certain, prices were $118/kWh on a volume-weighted average basis in 2021.

At the cell degree, typical BEV prices were just $97/kWh. This indicates that on average, cells represent 82% of the complete pack price. Over the past two years, the cell-to-pack expense ratio has diverged from the traditional 70:30 split, a result of adjustments to pack design, such as the introduction of cell-to-pack layouts.

On a local basis, battery pack prices were cheapest in China, at $111/kWh. Packs in the united state and also Europe cost 40% as well as 60% higher, specifically. This reflects the family member immaturity of these markets, the varied variety of applications and, for the greater end of the range, reduced volume as well as bespoke orders.

Prices remained to fall in 2021 as the fostering of the inexpensive cathode chemistry known as lithium iron phosphate (LFP) enhanced, and also as making use of costly cobalt in nickel-base cathodes continued to glide. Generally, LFP cells were nearly 30% less costly than NMC cells in 2021.

Nonetheless, also low-cost chemistries like LFP, which is particularly exposed to lithium carbonate prices, have actually felt the bite of rising prices throughout the supply chain. Considering That September, Chinese producers have actually increased LFP prices by in between 10-20%.

Based upon historical trends, BNEF's 2021 Battery Price Survey, which was launched in time for the virtual BNEF Summit Shanghai, anticipates that by 2024 ordinary pack prices ought to be below $100/kWh. It is at around this price point that automakers ought to have the ability to create and also market mass-market EVs at the same price (and with the very same margin) as equivalent interior burning vehicles in some markets. This thinks no subsidies are offered, but real prices techniques will certainly differ by automaker and also geography.

However, higher raw material prices imply that in the near-term, typical pack prices could rise to $135/kWh in 2022 in small terms. In the absence of other renovations that can reduce this effect, this might mean that the point at which prices fall below $100/kWh could be pushed back by 2 years. This would impact EV affordability or makers' margins as well as could injure the economics of power storage tasks.

James Frith, BNEF's head of power storage study as well as lead author of the report, claimed: "Although battery prices fell total throughout 2021, in the second half of the year prices have been increasing. We estimate that generally the price of an NMC (811) cell is $10/kWh greater in the 4th quarter than it remained in the first 3 months of the year, with prices currently closing in on $110/kWh.

This creates a challenging environment for car manufacturers, especially those in Europe, which have to enhance EV sales in order to meet ordinary fleet discharges criteria. These car manufacturers may now have to make a choice between reducing their margins or passing costs on, at the risk of putting customers off purchasing an EV."

Kwasi Ampofo, head of steels as well as mining at BloombergNEF claimed: "Prices for lithium have risen substantially this year as a result of restrictions within international supply chains, increasing demand in China and Europe and also the current production visuals in China. Although we expect demand to keep expanding in 2022, other variables such as global supply-chain restrictions and also China's manufacturing aesthetics should have been fixed by 1Q 2022. This will help to reduce lithium prices."

The path to attaining $100/kWh is clear, although the timing currently looks even more unclear. In 2021, a wave of automakers launched battery technology roadmaps describing just how prices can be lowered below $100/kWh. Companies like Renault and Ford have publicly revealed targets of $80/kWh by 2030.

Continued financial investment in R&D together with ability expansion throughout the supply chain will aid to enhance battery innovation and lower prices over the following decade, specifies the report. BloombergNEF expects next-generation technologies, such as silicon and also lithium steel anodes, solid-state electrolytes as well as new cathode product as well as cell manufacturing processes, to play a vital role in allowing these price decreases.

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