Saturday, June 15, 2024
NewsEV Battery Prices will Continue to Increase Until 2026

EV Battery Prices will Continue to Increase Until 2026

Lithium-ion batteries will increase in price over the next few years before decreasing again.

  • Experts believe the increase in demand will hike the prices of batteries until 2026

  • The additional factories currently planned will go online towards the middle of the decade, bringing prices down

  • Prices could then continue to decrease until 2031

The booming demand for electric vehicles will lead to an increase in battery prices that could add $1,500 to $3,000 to the price of EVs in 2026.

Despite having steadily declined over the past few years, prices for lithium-ion batteries will spike in 2026, according to experts, because the industry will not be ready to catchup until then.

According to the laws of supply and demand, a product that sees an increase in demand costs more to buy for a time, until suppliers gear up to produce more and re-establish the market’s equilibrium.

This is exactly what will happen to batteries, according to experts, since the industry is not yet ready to face the increasing demand for EVs.

This is why prices for lithium-ion batteries are expected to reach $138 per kWh in 2026, compared to about $128 per kWh today and a projected $110 per kWh next year.

This could add between $1,500 and $3,000 to the price of electric vehicles in four years since most EVs are equipped with 60-100 kWh batteries.

This hike in price will be temporary however, since many automakers and battery companies are currently building or planning to build additional battery factories which are all set to come online around 2025 to 2028.

The increased supply generated by these new plants will push the prices back down and this decreasing trend is expected to last until 2031, when a kWh of power could cost only around $90.

Cheaper batteries will allow more affordable electric vehicles, which will in turn make demand increase again, which will probably stabilise the prices or create another climbing trend.

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