Lithium-ion battery prices have fallen significantly over the past decade, but that trend might not continue as a “tsunami of demand is coming.”
As noticed by CNBC, E Source estimates that “battery cell prices will surge 22% from 2023 through 2026, peaking at $138 (£111 / €130) per kilowatt-hour.” If that prediction pans out, it would be a significant increase as battery cells currently cost around $128 (£103 / €121) per kWh today and are expected to drop to roughly $110 (£88 / €104) per kWh next year.
While the numbers look relatively small, you have to remember that many electric vehicles have battery packs with capacities of between 60-100 kWh. As a result, price increases quickly add up and this means EVs sold in 2026 could cost an extra $1,500 to $3,000 (£1,203 – £2,406 / €1,418 – €2,835) according to the firm’s estimates.
Prices are expected to climb due to a variety of factors including increased demand and a limited supply of lithium. This has already caused the price of lithium to skyrocket nearly 900% in the past year and a half, but as E Source noted, they were wrong to assume “capital markets would unleash the floodgates to establish dozens of new lithium mining projects. Instead, the investments have come in dribs and drabs, with most of it originating from China for the Chinese supply chain.”
While price increases are never welcome, E Source believes things will eventually get better. They expect prices to start falling in 2027 and continue declining through 2031, when they may drop to $90 (£72 / €85) per kWh.