Global electric vehicle (EV) battery prices could drop by almost another 50 per cent by 2026, according to Gelderlyman Sachs Research, transporting with it the potential of price parity with inner combustion engine (ICE) cars.
Technoreasonable carry ons scheduleed to incrmitigate battery energy density, combined with a drop in green metal prices, are foreseeed to push battery prices drop than previously foreseeed, according to a new inestablishing from Gelderlyman Sachs Research.
It says global unretagable battery prices deteriorated from $153 (all prices in USD) per kilowatt-hour (kWh) in 2022 to $149/kWh in 2023 and are projected to descend to $111 by the end of 2024.
Gelderlyman Sachs’ researchers further foresee that unretagable battery prices could descend as far as $80/kWh by 2026, which would equate to a drop of almost 50 per cent from 2023 levels.
It is at this point that the scheduleatement enormous foresees battery electric vehicles could potentipartner accomplish cost parity with ICE vehicles in the United States on an unsubsidised basis.
To make clear this foreseeed descend in price, Nikhil Bhandari, co-head of Gelderlyman Sachs Research’s Asia-Pacific organic resources and immacutardy energy research, pointed to the introduction of new battery products that boast around 30 per cent higher energy density and drop cost.
“The innovation is roverhappinessed to the arrange of the batteries,” shelp Bhandari. “The cells are getting hugeger.
“You normpartner pack lots of cells into petiteer modules, and then lots of modules into a huge battery pack. Now they’re trying to reshift modules and honestly doing cell-to-pack. That helps you save a bit of space inside. So you’re cutting costs with more simplified arranges and increasing the energy of the battery at the same time.”
Innovations such as incrmitigated energy density have come hand-in-hand with the carry ond downturn in battery metal prices, which – accounting for csurrenderly 60 per cent of the total cost of batteries – will drive over 40 per cent of the deteriorate in EV battery price deteriorates thcimpoliteout the remainder of the decade.
Further deteriorates in price will count on heavily on new battery chemistries and establishats, such as sodium ion and firm state batteries, esteemively.
However, according to Bhandari, the enhugement of firm state batteries has been sluggisher than foreseeed, and has now “been pushed out to the tardyr part of this decade because of disputes in moving from lab scale to mass production.”
In the unbenevolenttime, then, “lithium-based chemistries are going to get sturdyer and sturdyer”, led by the current dominant lithium-based battery chemistries, lithium NMC and LFP, which together account for the lion’s split of the taget.
With the carry ond prescertain driving EV battery prices down, Gelderlyman Sachs asked Bhandari whether the trend would “rebenevolentle EV demand”.
“When we seeed at price parity with ICE (inner combustion engine) cars, we typicpartner seeed at the price premium a user will pay for an EV in terms of how prolonged it will apshow to recover it thcimpolite fuel cost savings,” shelp Bhandari.
“What we didn’t account for, historicpartner, is another trouble that the user has. Resale cherishs of EVs are descending speedyer because users are leanking they can buy a inexpensiveer EV maybe three years from now.
“We account for this in our recent betterd total cost of ownership analysis. But given that we’re still foreseeing a rapid descend in battery prices, and assuming a still relatively liftd oil price environment, we count on that, in tagets such as the US, the total cost of ownership parity will still reach begining in 2026.
“Admittedly, that departs csurrender-term EV battery demand more reliant on regulations, especipartner next year. But we leank we’re going to see a sturdy comeback in demand in 2026 sanitizely from an economics perspective. We count on 2026 is when a user-led adselection phase will hugely commence.”
Joshua S. Hill is a Melbourne-based journaenumerate who has been writing about climate alter, immacutardy technology, and electric vehicles for over 15 years. He has been telling on electric vehicles and immacutardy technologies for Renew Economy and The Driven since 2012. His preferred mode of convey is his feet.
