Annual survey finds battery prices dropped 13% in 2020


Lithium-ion battery pack prices, which were above $1,100 per kilowatt-hour (KWh) in 2010, have fallen 89% to $137/kWh in 2020. By 2023, average prices will be close to $100/kWh, according to the latest forecast from BloombergNEF (BNEF).

In fact, BNEF said it found battery pack prices of less than $100/kWh for batteries in e-buses in China. This is the lowest price ever reported, according to the company. While these were the lowest reported price, the volume-weighted average price for e-buses in China was slightly higher, $105/kWh, said BNEF.

Battery electric vehicle (BEV) pack prices are $126/kWh on a volume-weighted average basis. At the cell level, average BEV prices were just $100/kWh. This indicates that on average, the battery pack portion of the total price accounts for 21%.

BNEF’s 2020 Battery Price Survey, which considers passenger EVs, e-buses, commercial EVs and stationary storage, predicts that average pack prices will be $101/kWh by 2023. At this price point, automakers should be able to produce and sell mass market EVs at the same price and margin as comparable internal combustion vehicles, said BNEF. This assumes no subsidies are available, but actual pricing strategies will vary by automaker and geography, according to BNEF.

Price reductions in 2020 are thanks to increasing order sizes, growth in BEV sales and the introduction of new pack designs. New cathode chemistries and falling manufacturing costs will drive prices down in the near term and the prices of cathode materials have fallen since reaching a high in spring 2018.

Leading battery manufacturers are now enjoying gross margins of up to 20% and their plants are operating at utilization rates over 85%, said the company. Maintaining high utilization rates is key to reducing cell and pack prices. If utilization rates are low, then equipment and building depreciation costs are spread over fewer kilowatt-hours of manufactured cells.

Figure 1: Volume-weighted average pack and cell price split

Source: BloombergNEF

Thus far, the path to achieving $101/kWh by 2023 looks clearer; however, it is not certain how the industry will reduce prices even further from $100/kWh down to BNEF’s expectation of $58/kWh by 2030. This is not because it is impossible but rather that there are several options and paths that could be taken, said the company.

One route to achieving lower prices is the adoption of solid-state batteries. BNEF expects that these cells could be manufactured at 40% of the cost of current lithium-ion batteries, when produced at scale. These reductions would come from savings in the bill of materials and in the cost of production, equipment and the adoption of new high-energy density cathodes. Consequently, to realize these reduced prices, the supply chain for key materials, such as solid electrolytes, not used in lithium-ion batteries today, needs to be established.

James Frith, BNEF’s head of energy storage research and lead author of the report, said, “It is a historic milestone to see pack prices of less than $100/kWh reported. Within just a few years we will see the average price in the industry pass this point. What’s more, our analysis shows that even if prices for raw materials were to return to the highs seen in 2018, it would only delay average prices reaching $100/kWh by two years — rather than completely derailing the industry.”

Daixin Li, a senior energy storage associate at BNEF, added, “The increasingly diversified chemistries used in the market result in a wide range of prices. Battery manufacturers are racing to mass-produce higher energy-density batteries with some new chemistries such as lithium nickel manganese cobalt oxide — NMC (9.5.5) — and lithium nickel manganese cobalt aluminum oxide — NMCA — set to be mass-produced as early as 2021. Lithium iron phosphate — LFP — however plays as a cost-competitive alternative, contributing to the lowest reported cell prices of $80/kWh.”

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at

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