Big Change in the Cost of EV Batteries

A huge concern in the auto industry—always and everywhere—is cost. The cost of batteries for EVs is showing an impressive decline.

By Gary S. Vasilash

One of the things about electric vehicle development that doesn’t get quite the amount of attention that it deserves is the rate at which the prices of lithium-ion battery packs are declining.

According to the US. Department of Energy Vehicle Technologies Office, the cost of a Li-ion battery pack declined 87% between 2008 and 2021, based on 2021 constant dollars.

The DOE estimates that the cost of a Li-ion battery pack circa 2021 is $157/kWh based on a usable energy basis (i.e., the battery pack may have more stored energy but it is not used because it is important to maintain the health of the battery).

Back in 2008 that number was $1,237/kWh.

Impressive decline in battery costs. (Image: DOE)

Recognize that what is happening is that there are improvements in technologies and chemistries, as well as in manufacturing economies of scale. (Did you notice that when people are talking about battery plants they typically refer to them as “gigafactories”? They’re big and make lots of batteries, which leads to the economies of scale. It is somewhat odd, if you think about it, to know that Mars makes about 15 million Snickers per day and there is no mention of a “megafactory.”)

The improvements in technologies and chemistries are probably the real, as they say, game-changer in batteries.

Realize that you have vehicle manufacturers, Tier One suppliers, battery companies, chemical companies, electronics companies, utility companies, energy suppliers, research organizations, universities, and undoubtedly others working on batteries.

Nowadays only a fraction of them are working on eking out improvements for internal combustion engines, which leads to the hypothesis that with time ICEs are going to run out of time.

That 87% is a big number. And the decline in price-performance will undoubtedly continue to change for the better.

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