Electrification
Visualizing the Freefall in Electric Vehicle Battery Prices
Electric Vehicle Prices Fall as EV Battery Tech Improves
Electric vehicles (EVs) only accounted for around 3.2% of global car sales in 2020—a figure that’s set to grow in the coming decade, largely due to falling EV battery costs.
With rising production and technological improvements, batteries are becoming cheaper to produce, making EVs increasingly competitive with gas-powered cars.
Wright’s Law is Right So Far
According to Wright’s Law, also known as the learning curve effect, lithium-ion (Li-ion) battery cell costs fall by 28% for every cumulative doubling of units produced.
Wright’s Law has accurately predicted the decline in battery costs and so far, reported battery prices have been in line with modeled forecasts. The battery pack is the most expensive part of an electric vehicle. Consequently, the sticker prices of EVs fall with declining battery costs.
By 2023, the cost of Li-ion batteries is expected to fall to around $100/kWh—the price point at which EVs are as cheap to make as gas-powered cars.
| Year | Price of Toyota Camry ⛽️ | Price of a 350-mile Range EV 🔋 |
|---|---|---|
| 2019 | $24,000 | $50,000 |
| 2021 | $25,000 | $39,000 |
| 2023 | $26,000 | $26,000 |
| 2025 | $26,000 | $18,000 |
Figures represent the Manufacturer Suggested Retail Price (MSRP)
EVs are already cheaper to own and operate than comparable gas-powered cars due to savings from gas, maintenance, and resale value. Therefore, a reduction in retail electric vehicle prices may enable them to compete more directly with gas-powered cars.
According to ARK Invest, the manufacturer’s suggested retail price (MSRP) of a 350-mile range EV will be on par with that of a like-for-like Toyota Camry in 2023. Furthermore, the price of a 350-mile range EV is projected to drop by 53% between 2021-2025—making it $8,000 cheaper than the Camry.
The Electric Catch Up
Electric vehicles are a key piece of the puzzle in the transition to clean energy. Hence, growing consumer awareness around climate change is a catalyst for the EV space.
However, as EV production increases, so does the need for various critical minerals, charging infrastructure, and more. Price is just one of the hurdles that EV manufacturers need to overcome on the road to mainstream EV adoption.
Electrification
Charted: Lithium-Ion Batteries Keep Getting Cheaper
Cell prices have fallen 73% since 2014.
Lithium-Ion Batteries Keep Getting Cheaper
Battery metal prices have struggled as a surge in new production overwhelmed demand, coinciding with a slowdown in electric vehicle adoption.
Lithium prices, for example, have plummeted nearly 90% since the late 2022 peak, leading to mine closures and impacting the price of lithium-ion batteries used in EVs.
This graphic uses exclusive data from our partner Benchmark Mineral Intelligence to show the evolution of lithium-ion battery prices over the last 10 years.
More than Half of the Battery Price Comes from the Cathode
Lithium-ion batteries operate by collecting current and directing it into the battery during the charging process. Typically, a graphite anode attracts lithium ions and retains them as a charge.
During discharge, the cathode draws the stored lithium ions and channels them to another current collector. The circuit functions effectively because the anode and cathode do not come into direct contact and are suspended in a medium that facilitates the easy flow of ions.
Currently, 54% of the cell price comes from the cathode, 18% from the anode, and 28% from other components.
Declining Prices
The average price of lithium-ion battery cells dropped from $290 per kilowatt-hour in 2014 to $103 in 2023.
| Year | Global Avg. Cell Price ($ per kilowatt-hour) |
|---|---|
| 2014 | 290 |
| 2015 | 230 |
| 2016 | 180 |
| 2017 | 140 |
| 2018 | 128 |
| 2019 | 120 |
| 2020 | 110 |
| 2021 | 99 |
| 2022 | 129 |
| 2023 | 103 |
| 2024 (ytd) | 78 |
In the coming months, prices are expected to drop further due to oversupply from China.
Despite declining prices, battery demand is projected to increase ninefold by 2040, with the battery industry’s total capital expenditure expected to nearly triple, rising from $567 billion in 2030 to $1.6 trillion in 2040.
| Lithium ion Battery Market Size | Global Capacity (Gigawatt hour) |
|---|---|
| 2016 | 163 |
| 2017 | 219 |
| 2018 | 353 |
| 2019 | 496 |
| 2020 | 710 |
| 2021 | 1026 |
| 2022 | 1652 |
| 2023 | 2555 |
| 2024F | 3476 |
Learn More About Batteries From Visual Capitalist
If you enjoyed this post, be sure to check out this graphic that ranks the top lithium-ion battery producing countries by their forecasted capacity in 2030.
Electrification
Ranked: The Top Lithium-Ion Battery Producing Countries by 2030
Chinese companies are expected to hold nearly 70% of global battery capacity by decade’s end.
Top Lithium-Ion Battery Producers by 2030
Lithium-ion batteries are essential for a clean economy due to their high energy density and efficiency. They power most portable consumer electronics, such as cell phones and laptops, and are used in the majority of today’s electric vehicles.
This graphic uses exclusive data from our partner, Benchmark Mineral Intelligence, to rank the top lithium-ion battery producing countries by their forecasted capacity (measured in gigawatt-hours or GWh) in 2030.
China to Keep Dominance
Chinese companies are expected to account for nearly 70% of global battery capacity by 2030, delivering over 6,200 gigawatt-hours. Chinese giant Contemporary Amperex Technology Co., Limited (CATL) alone is forecasted to produce more than the combined output from Canada, France, Hungary, Germany, and the UK.
| Country | 2030F capacity (GWh) | Top producers |
|---|---|---|
| 🇨🇳 China | 6,268.3 | CATL, BYD, CALB |
| 🇺🇸 U.S. | 1,260.6 | Tesla, LGES, SK On |
| 🇩🇪 Germany | 261.8 | Tesla, Northvolt, VW |
| 🇭🇺 Hungary | 210.1 | CATL, SK On, Samsung |
| 🇨🇦 Canada | 203.8 | Northvolt, LGES, VW |
| 🇫🇷 France | 162.0 | Verkor, Prologium, ACC |
| 🇰🇷 South Korea | 94.5 | LGES, Samsung, SK On |
| 🇬🇧 UK | 66.9 | Envision, Tata |
Currently, China is home to six of the world’s 10 biggest battery makers. China’s battery dominance is driven by its vertical integration across the entire EV supply chain, from mining metals to producing EVs.
By 2030, the U.S. is expected to be second in battery capacity after China, with 1,261 gigawatt-hours, led by LG Energy Solution and Tesla.
In Europe, Germany is forecasted to lead in lithium-ion battery production, with 262 gigawatt-hours, most of it coming from Tesla. The company currently operates its Giga Berlin plant in the country, Tesla’s first manufacturing location in Europe.
Learn More About Batteries From Visual Capitalist
If you enjoyed this post, be sure to check out Charted: Investment Needed to Meet Battery Demand by 2040. This visualization shows the total capital expenditure (capex) requirements to build capacity to meet future battery demand by 2030 and 2040.
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