As electric vehicles rapidly become part of our lives, one of the biggest hurdles—the cost of batteries—is seeing record declines. According to new data from the U.S. Department of Energy (DOE), the price of electric vehicle batteries has decreased by nearly 90% over the past 15 years. But how will this drop in battery costs affect the prices of electric vehicles?
Electric Vehicle Battery Costs Have Dropped by 90% in the Last 15 Years
In 2008, the cost of a lithium-ion electric vehicle battery was around $1,415 per kWh of usable energy. This high cost was a significant barrier to the widespread adoption of electric vehicles. However, by 2023, the cost of the same battery had fallen to approximately $139 per kWh. So, what caused this drastic difference?
Several critical factors are behind this significant drop. First and foremost, there has been incredible progress in battery technology. Improvements in the chemical composition of batteries and more efficient production processes have greatly contributed to lowering costs. Additionally, the increase in production volumes has significantly reduced the cost per unit. This not only paved the way for more electric vehicles on the roads but also for the production of more affordable electric vehicles.
The long-awaited regulation for electric cars has come from the charging network Electrify America. Electric cars will no longer be charged for hours.
This reduction in costs is promising not only for today but also for the future. According to Bloomberg, in 2024, about 28% of the total cost of an electric vehicle will come from the battery. However, this figure could drop to as low as 19% by 2030. This means that the decline in battery prices will make electric vehicles more accessible.
Another key factor contributing to the reduction in battery costs is recycling. Companies are recycling old electric vehicle batteries to make them reusable. Companies like Redwood Materials, founded by Tesla co-founder J.B. Straubel, can recover 95% of the metals in old electric vehicle batteries. These efforts naturally drive prices down as well.
Automakers are preparing to launch lower-cost models. In the future, as more companies produce their own electric vehicle batteries, costs could decrease even further, bringing electric vehicles closer to replacing fossil-fuel-powered vehicles.
What do these developments mean for you? Would you consider transitioning to an electric vehicle? Feel free to share your thoughts in the comments section below.
