According to the latest forecast report released by Goldman Sachs, the cost of electric vehicle batteries will fall faster than expected.
Lithium battery prices have fallen dramatically over the past 20 years, fueling the electric vehicle revolution. However, due to the impact of soaring metal costs and overall inflation, lithium battery prices have risen instead of falling in recent years.
Source: NIO
Goldman Sachs Research estimates that the cost of vehicle power batteries will drop to $99 per 1kWh of electricity in 2025, a 40% drop from 2022 (previous forecast was a 33% drop). This milestone is considered a turning point for the massive expansion of electric vehicles in the market.
Goldman Sachs analysis believes that more than half of the reason is the decline in the prices of raw materials for electric vehicles such as lithium, nickel and cobalt. Battery pack prices are expected to decline by an average of 11% per year from 2023 to 2030, Nikhil Bhandari, co-head of Asia Pacific natural resources and clean energy research at Goldman Sachs Research, wrote in the team’s note.
Note: Goldman Sachs focuses on the cost at the battery pack level, not the cost in the battery cell.
At the battery pack level, prices vary widely in the EV industry because automakers have many different ways of producing battery packs.
