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.

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.

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.

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.