Forbes | Jan. 6, 2025

Battery prices will drop below long-sought threshold of $100/kWh — SatKartar Khalsa, Senior Initiative Director, Climate Imperative Foundation

“As the market for electric vehicles grows, analysts are watching for signs of a major inflection point: the sticker price of an EV becoming as cheap as a gas-powered car. As anyone who’s shopped for an EV knows, the battery is one of the costliest components – but the good news is battery packs are getting cheaper. A battery pack price of $100 per kilowatt-hour is considered the crucial point at which EVs become price competitive with gas-powered cars, a shift that is key to mainstream EV adoption.

Many expect to reach this inflection point in the next several years – we think it will happen as soon as this year.

In 2024, global average battery prices fell 20% to $115 per kWh, driven by excess production capacity in China and burgeoning low-cost battery chemistries like lithium iron phosphate. In 2025 these conditions will persist and aided by low lithium prices, will continue to put downward pressure on battery prices. In China, battery prices already dipped below $100 per kWh in 2024. Whether we see these low prices around the world in 2025 will depend on trade dynamics for major auto markets, including tariffs.

Once EVs are as cheap as gas-powered cars, the trend won’t stop there. Battery prices have fallen over 90% in the past 15 years and will continue to fall as production costs decline and emerging battery technologies mature. EVs will be the most economical option for consumers, and by a growing margin. Add to that the considerable cost savings from not filling up with gas, and it’s easy to predict EVs will become the default choice for mainstream consumers in the next few years.”

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