Electric cars: battery prices are collapsing at breakneck speed

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Electric car battery prices continue to fall. And this year, according to an analysis by BloombergNEF, they have fallen by 20%, to $115 per kilowatt-hour. This information was obtained by studying 343 data points. And according to a Bloomberg article, the decline is due to overcapacity, lower raw material prices and the use of cheaper lithium-iron-phosphate batteries. Over the past seven years, the average price of lithium-ion batteries has never been as significant.

Soon, “parity”?

As a reminder, the battery is one of the most expensive components of an electric car. And thanks to the sharp drop in 2024, electric car prices could fall to the price level of their thermal equivalents sooner than expected (a situation that should encourage more people to switch to electric cars). According to the study cited by Bloomberg, the average price of a kilowatt hour could drop to $100 in 2026, which would allow this “parity” between electric and thermal cars to be reached.

It is also important to note that this is the average global price. According to the report, in China, electric cars are already cheaper than their equivalents with a combustion engine. This is due to overcapacity in production that forces companies to reduce their profits in order to gain more market share.

Bloomberg also indicates that after falling below $100, the price of a kilowatt hour should drop to $69 in 2030. But at the same time, the agency warns that overcapacity will not become the norm in the long term. And it also indicates that prices depend on many factors, such as sales of electric cars. Geopolitical tensions and customs tariffs could also have an impact on the market.

• According to a study by Bloomberg, the prices of electric car batteries have fallen by 20% in 2024
• This decline would be attributed to overcapacity in production and to prices of raw materials and components that have fallen
• Furthermore, if the decline continues, the price of an electric car could be the same as the price of its thermal equivalent in 2026

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