The costs of the Electric vehicle battery have been soaring in the year and that is because of the material and battery component prices increasing.
Price of the Lithium-ion battery pack’s volume-weighted average has reached an amount of $151 per kwh in the year which is an increase of 7% over the year 2021. This is going to mark the first time average increase since the BNEF had begun the tracking of prices in the year 2010 and it delays the price parity of electric vehicle with the internal combustion cars.
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This is a figure which represents an average through different end uses of multiple battery including the different kinds of the electric buses, vehicles and the stationary energy storage adding that a specific average for the EV packs was $138 per kwh in the year 2022.
The average prices may have been higher in the year had it not been for the increased adoption of lower cost of lithium chemistry as the alternative for NMC which is used by a lot of manufacturers. On an average, the LFP battery cells had been 20% lesser than the NMC cells.
Though, the overall cost increase has been outpacing the increase in the adoption of LFP chemistry as per BNEF. LFP had also not been immune to the rise in the cost. On the pack basis, the prices had risen by 27% in the year 2022.
The battery price increase has also come despite a lot of announcements due to battery manufacturing which is going to eventually increase the supply but has not begun to impact the market yet.
The BNEF is expecting the battery costs to for dropping once again in the year 2024, when more of the lithium mining and refining capacity is going to be online and it will reduce the prices of the market.