A battery price war is kicking off that could soon make electric cars cheaper. Here’s how The main cost of an electric vehicle (EV) is its battery. The high cost of energy-dense batteries has meant EVs have long been more expensive than their fossil fuel equivalents. But this could change faster than we thought.
Despite this, battery prices have kept falling – just not by as much as they otherwise would have. The world’s huge demand for lithium has led to strong growth in supply, as miners scramble to find new sources. CATL, for instance, is spending A$2.1 billion on lithium extraction plants in Bolivia.
The new study looks back over three decades, including analyzing the original underlying datasets and documents whenever possible, to arrive at a clear picture of the technology’s trajectory. The researchers found that the cost of these batteries has dropped by 97 percent since they were first commercially introduced in 1991.
Moreover, falling costs for batteries are fast improving the competitiveness of electric vehicles and storage applications in the power sector.
Now, MIT researchers have carried out an exhaustive analysis of the studies that have looked at the decline in the prices these batteries, which are the dominant rechargeable technology in today’s world.
But cost competitiveness is a challenge right now because lithium prices are unusually low. The global supply of lithium has grown more quickly than demand since 2022, leading to lower prices. Researchers and analysts expect that sodium-ion batteries will have a cost advantage over lithium-ion in the long run.