Home Business Electric cars, the price of batteries rises after 11 years of declines

Electric cars, the price of batteries rises after 11 years of declines

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Electric cars, the price of batteries rises after 11 years of declines

One of the cornerstones of the auto industry to ensure the success of the electric migration has always been the constant decline in battery prices. But commodity hikes are playing a bad joke. At the end of September, data from AlixPartners’ Global Automotive Outlook, the prices of cobalt, nickel and lithium accounted for more than half of a $5,000 cost of raw materials for an electric car. And yesterday BloombergNEF certified the first increase since 2010. It’s 7% on average. Prices had fallen from more than $1,000 per kilowatt-hour in 2010 to $141 in 2021. On a regional basis in China, it was as low as $127 per kWh. In the US and Europe, prices were 24% and 33% higher. Manufacturers’ margins have also shrunk.

Quota 100 in 2026?

According to BloombergNEF, a reversal will only be seen in 2024. And for 2026 (two years after expected) the coveted 100 quota could be reached, which on paper would translate into price parity between EVs and traditional cars. But four years is a long time and the macroeconomic picture is not very encouraging.

Furthermore, $100 per kWh is a nominal figure that has been around for over a decade and doesn’t fully take into account how the cost of almost everything has risen due to inflation, particularly over the past 18 months. Average new vehicle transaction prices in the United States have risen to more than $48,000 this year, the highest figure on record. Costs and prices have only risen also for internal combustion vehicles.

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Lithium iron phosphate batteries that have limited damage

Coming back to batteries, the biggest factor is the rising cost of raw materials, including cobalt, nickel and lithium. While the prices of nickel (-41% since March) and cobalt (-38% since May) have dropped in recent months, lithium has remained at very high values ​​(+185% for one year), and in any case all these metals they have remained on prices never seen before.

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The average battery price would have been even higher were it not for the switch to low-cost lithium iron phosphate (LFP) batteries, which contain no nickel or cobalt. LFP batteries have gained significant market share over the past three years, with BloombergNEF predicting they will account for around 40% of global EV sales this year.

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