- The cost of an EV battery pack has dropped from US$1,415-per-kWh in 2008; to US$139-per-kWh in 2023
- The $100-per-kWh figure has long been regarded as the holy grail of battery costs
- Price parity between electric vehicles and their ICE counterparts is essential for mass EV adoption
The sole reason an electric vehicle is more expensive than a comparable gas-powered counterpart is the cost of its lithium-ion battery, so a new report from the United States Department of Energy (DoE) bodes well for EVs, and their manufacturers’ aim of continuing to close that price gap.
According to the department’s Vehicle Technologies Office, the cost of a battery pack dropped from US$1,415-per-kWh in 2008; to US$139-per-kWh in 2023, or about 90 per cent. Adjusted for inflation and the current U.S. dollar value, that 2008 figure is approximately US$1,000.
So, taking the 2025 Ioniq 5 large battery pack of 84.0 kWh as an example, the price for the battery alone in 2008 would have been US$118,860, compared to US$11,676 in 2023.
The study credits breakthroughs in battery technologies, such as the chemical make-up of the cells, in addition to improvements in manufacturing and economies of scale for the lowered cost.
The $100-per-kWh figure has long been regarded as the holy grail of battery costs; however, getting from the current cost to that will require more innovation, and possibly even moving away from lithium-ion in favour of different battery chemistries. There is certainly no shortage of companies working to achieve that, from big-time global automakers to small start-ups.
The global slowdown in EV sales shouldn’t have an effect on battery costs, as research and development into more efficient ways to produce battery packs is ongoing and not tied to sales volumes. In fact, lowering the cost of batteries will spur more EV sales, as prices will come down. Price parity between electric vehicles and their ICE counterparts is regarded by many automotive pundits as the tipping point for the adoption of EVs, and if that is to be achieved, further reductions in the cost of producing batteries need to be realized.
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