Lithium-ion battery pack prices have dropped to a record low of $115 per kilowatt-hour, representing a 20% decrease from 2023 and the biggest annual drop since 2017.
According to an analysis by BloombergNEF (BNEF), the figure is a global average, with prices varying between countries.
Cell manufacturing capacity, economies of scale, low metal and component prices, adoption of lithium-iron-phosphate (LFP) batteries, and an EV sales slowdown are cited as factors driving the decline.
For the past two years, battery manufacturers have been aggressively producing in anticipation of surging demand, and overcapacity is rife, as global capacity of fully commissioned battery cells currently stands at 3.1 terawatt-hours. That is more than 2.5 times the annual demand for lithium-ion batteries in 2024, according to Batteries News.
“One thing we’re watching is how new tariffs on finished battery products may lead to distortionary pricing dynamics and slow end-product demand,” said Yayoi Sekine, head of energy storage at BNEF. “Regardless, higher adoption of LFP chemistries, continued market competition, improvements in technology, material processing and manufacturing will exert downward pressure on battery prices.”
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