EV battery prices have been falling, and could drop even more over the next two years, according to a new Goldman Sachs report.
At the pack level, global average battery prices fell from $153 kwh in 2022 to $149 in 2023, according to the report, which predicts further declines $80 per kwh in 2026. That's about 50% lower than in 2023, and well past the point where EVs are catching up price parity for gasoline vehiclesanalysts estimate.
Goldman Sachs EV battery price forecast for October 2024
Analysts say battery prices continue to decline in two key areas. Another technological advancement, in particular large cells and cell packaging technology which reduce the number of battery modules or completely destroy them. This can help not only to reduce the cost, but reach a 30% increase in the maximum power that can keep the size of the battery pack right, analysts believe. Tesla has moved to produce its own large-format 4680 cells, but has had trouble keeping production costs for those cells low.
Another factor is depreciation prices of raw materials such as lithium and cobalt. Higher raw material prices contributed to the increase in EV battery costs in 2022, but that is declining and will continue to decline until 2030, representing about 40% of the expected reduction in battery costs, according to Goldman Sachs.
Comparing the 4680 vs. 2170 – Panasonic
This follows another report from Goldman Sachs earlier this year that predicted a 40% drop in EV battery costs between 2023 and 2025, which analysts say could boost sales, potentially allowing EVs to claim 50% of the US market by 2030. .
Despite the near-pandemic outbreak of problems, EV battery prices have fallen steadily since the modern EV era began with the arrival of the Tesla Roadster nearly 15 years ago. Prices have fallen 90% since then, according to the US Department of Energy.