EV Battery Prices Are On The Rise

The climate crisis will reach an inflection point when the cost of using sustainable solutions is equivalent or less than the cost of carbon-emitting ones. Startups in every industry within climatetech are racing to make this idea a reality. The area of electric vehicles has seen sustained cost improvements since 2010; the price per kilowatt or kWk prices has dropped from $1,220 to $132. But that decline is facing its first increase since 2010 with an anticipated $3 rise in 2022.

What are the factors that are contributing to this rise? In short, the same ones that are creating rising prices across industries: raw material costs and supply constraints. The raw materials required to create EV batteries – lithium, cobalt, and nickel – are up. Lithium carbonate alone has gone up 400% in the last year alone. Then, with demand for EVs and energy storage on the rise, are ticking prices skyward. The inflection point for EV battery prices to become competitive with gas-powered vehicles is about $100/kWh. The increase brings us $35 away from the goal and pushes the timeline back about two years. So far, it appears the automakers will be the ones to bear the burden of this price increase.

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