Driving Down Costs: EV Battery Prices Plummet 90% in 15 Years, Nearing Cost Parity with Gasoline Vehicles

The U.S. Department of Energy (DOE) estimates that the cost of a lithium-ion battery pack used in light-duty electric vehicles has plummeted by 90% in the past decade and a half.

In 2023, according to the Department of Energy's calculations, the average cost of battery packs on a per kilowatt-hour basis for large-scale production, which is defined as at least 100,000 units annually, was $139. While this price has not yet reached the pivotal $100 per kWh threshold that experts believe would make electric vehicles financially competitive with traditional petrol cars, it marks a notable decrease from the 2008 average cost of $1,415 per kWh when adjusted for inflation to 2023 dollars.

Cost of electric vehicle battery packs from 2008 to 2023, as reported by the U.S. Department of Energy.

The significant drop in prices can be attributed to advancements in battery technology and composition, along with enhanced manufacturing processes and a rise in production quantities, as stated by the Department of Energy. Notably, there has been a remarkable surge in production since 2008, coinciding with the introduction of the Tesla Roadster and the beginning of the contemporary electric vehicle movement, providing car manufacturers with cost benefits due to larger scale production that were previously unavailable.

The cost of electric vehicle batteries has seen a substantial decline in recent times, despite experiencing occasional disruptions due to COVID-19 and associated logistical challenges. In 2019, there was a 13% decrease in price, followed by a rise in 2022, and then a subsequent decrease. According to Bloomberg New Energy Finance, there was a 14% reduction in price in 2023.

Evaluating the Differences Between the 4680 and the 2170

In the realm of tech advancements, Tesla has promoted its 4680 battery cells as essential for making electric vehicles more accessible price-wise. However, this strategy has yet to yield dividends. During the company's yearly meeting with shareholders in June, Elon Musk, the CEO, acknowledged that Tesla is actively working on reducing the expenses associated with their 4680 cells. He admitted that the cost of producing these cells in-house currently exceeds the price of purchasing them from third-party providers.

Leaving Tesla out of the equation, the expense of batteries is anticipated to keep declining. Earlier in the year, Goldman Sachs released a study forecasting a reduction in battery expenses that could be likened to a 40% decline from 2023 to 2025. According to experts, the reduction in battery costs might enable electric vehicles to be competitively priced with traditional gasoline-powered cars in certain regions as soon as next year.

Labels:

Participate:

Readers of this article typically also enjoyed:

Spread the Word:

Get in touch with the author:

Stay Updated with Us:

Eco-Friendly Vehicle Digest

Subscribe to receive daily updates on the newest eco-conscious vehicle information and eco-friendly news straight to your email!

I consent to getting email communications from Green Car Reports and acknowledge my ability to opt-out at any given moment. Refer to the Privacy Policy for more details.

Nissan's first electric vehicle has become the brand's most affordable option.

Rivian has announced that for the production version of the R2, the charging port will be relocated to the back left side, possibly to facilitate easier access to high-speed charging stations.

The transformation of the electric VW ID.Buzz into campervans has begun.

The cost of the 2025 Volvo EX90 has surged by $3,300, bringing its new price tag to $81,290.

During the 2024 Monterey Car Week, Acura plans to unveil a concept for an electric SUV.

In July, China saw a change in its automotive trends with plug-in vehicles surpassing the sales of traditional gas-powered cars that aren't hybrids.

ChargePoint's Omni Port will dispense the correct connector for electric vehicle charging, be it NACS or CCS/J1772.

Coating vehicles with a special paint might reduce interior temperature and boost electric car performance.

Some Tesla owners are poised to offer assistance to the Texas power network.

The 2025 Ford Police Interceptor now comes equipped with a standard hybrid powertrain, known for its enhanced speed and efficiency.

The initial electric vehicle from Stellantis' Dodge line will not focus on distance and energy use.

Associated Content

Top Picks

Image Gallery

Updates

Press

Retailer Resources

Feed

Organization

Connect With Us Now: