Electric car battery pack prices fell 89% in just 10 years
And this year, they dipped under $100 per kilowatt hour for the first time.
Battery packs for electric cars checked off a milestone this year -- just an ever-so-slight ray of sunshine on what's been a pretty gloomy 2020. For the first time, prices slid under $100 per kilowatt hour, and thorough analysis shows prices fell a whopping 89% in just 10 years.
The insights come from Bloomberg New Energy Finance's annual battery price survey. Both nuggets of information are very good news for those with electric cars in the pipeline. The core, basic takeaway from both the year- and decade-long trend is this: as battery pack prices fall, EVs become less expensive. At the same time, automakers can begin selling the cars for a profit.
Let's look at the year-long trend first. According to Bloomberg NEF's data, prices fell 13% from 2019 levels. The average price sits at $137 per kWh for passenger EVs, commercial vehicles and buses.. The specific instance of prices falling under $100 per kWh came from batteries fitted to electric buses in China, however. Even though it was a small sliver of the analysis, it points to a positive trend for automakers and other companies.
Looking at just passenger EVs, the volume-weighted average sits at $126 per kWh -- even better than the total average. Focusing the microscope further revealed the packs cost $100 per kWh at the cell level, according to the data. In real dollars and cents, the battery pack makes up 21% of an electric car's price tag. To be even more specific, let's look at an example.
The 2020 Chevrolet Bolt EV costs $36,500 before any tax credits or incentives. If we apply Bloomberg NEF's average data, $7,665 of that cost is just for the battery pack. Quickly, it's easy to see why automakers have a tough time pulling profits out of EVs as they sit, and why pushing price per kWh down is so important.
Bloomberg NEF sees that happening, though. By its forecast, the average price per battery pack should fall below $101 per kWh and allow automakers to truly start pricing EVs at a price parity with cars powered by an internal-combustion engine. Of course, that doesn't take into account mark-ups for luxury vehicles and other features, but if automakers get close to the price of a traditional car, everyone starts to win.
When it comes to the decade-long trend, it shows how the advances in production and raw materials used for battery packs. Back in 2010, packs rang in at $1,100 per kWh for a reference point. That's a huge drop in what's really not a whole lot of time when it comes to the auto industry. Now, all eyes are on the future to push the price down well past $100 per kWh. So far, solid-state batteries are a leading contender to get the job done. They pack more energy into a unit with cheaper resources, but so far, no company has devised a way to manufacture them at scale.
When that happens, we very well could see some legitimately cheap EVs with the creature comforts we come to expect in a new car.
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