Electric Vehicle Battery Cost Touches $100/kWh For The First Time, Making Price-Matching ICE Vehicles A Reality

Battery packs used in electric vehicles are becoming cheaper and for the first time are nearing competitive parity in terms of cost with gasoline-powered vehicles, according to a survey conducted by Bloomberg.

What Happened: The average price per kilowatt-hour (kWh) for a lithium-ion battery pack has fallen to $137 in 2020, down from $157 in 2019, a survey of 150 buyers and sellers revealed, reported Bloomberg Wednesday.

The parity level with gasoline engines is near $100/kWh. The Bloomberg survey found that batteries for e-buses in China are reported to be $100/kWh in some cases.

Battery makers are reportedly expected to reach the $101/kWh levels in 2023, which would be a significant decline from a decade ago when battery pack prices averaged more than $1,000/kWh.

Logan Goldie-Scot, an author of the report resulting from the research, said that cost-competitive EVs are inevitable in the short-term.

“For many vehicle segments, it’s in the next three or four years,” said Goldie-Scot. The research concluded that even if raw material costs return to highs seen in 2018, $100/kWh packs would see a delay of only a couple of years.

Why It Matters: The battery pack is the most expensive part of an EV and makes up for 30% of the total cost to consumers, as per Bloomberg.

Segment leader Tesla Inc (NASDAQ: TSLA) pays an estimated average of $115/kWh for batteries compared with $128/kWh it paid last year, according to the survey.

Electric buses in China use Lithium Ferrophosphate (LFP) chemistry, which is also increasingly making its way into smaller vehicles like cars, reported Electrek.

Related Link: Tesla Analysts: Battery Day All About Costs, 0 kWh Milestone

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