In a first of its kind since 2010, the cost of batteries has increased. These higher prices, coupled with rising costs of raw materials, are projected to hamper the spread and use of electric vehicles around the world.
A report authored by BNEF indicated that the price of batteries rose to an average of 151/kwh, showing a slight increase of 7% from a year earlier. This increase was a result of the rising prices for battery metals such as lithium and cobalt, as well as nickel. However, in the coming years, these prices are predicted to increase even more.
The $100 per kilowatt-hour mark has been identified by the automotive industry as the threshold at which EVs will become competitively priced with fuel-powered cars. However, the skyrocketing costs of lithium, which have multiplied tenfold since the beginning of 2021, along with nickel’s 75% increase and this year’s cobalt prices, which have doubled their average over 2020, have pushed battery prices upwards.
In this regard, BloombergNEF predicts a two-year delay, which means the $100 per kilowatt-hour level could be reached as early as 2026. This is a significant transitional risk that will have a negative impact on carmakers’ ability to manufacture and sell an increasing number of electric vehicles in regions without EV incentives.
Actually, the price of batteries would have increased significantly if Chinese battery and automobile manufacturers hadn’t chosen LFP batteries, which are significantly less expensive because they don’t use expensive metals such as nickel and cobalt. Because of its low cost, this year saw the demand for LFP increase by almost twofold to 603 GWh compared to last year.
Depending on where you are, LFP battery packs can still be costly. They cost, on average, $127 per kilowatt-hour in China, as opposed to 24% more in the United States and 33% more in Europe. The difference in cost is that long-range battery packs made of expensive metals are preferred by the western market, while underdeveloped markets incur high cost of production.
The report’s lead author, Evelina Stoikou, an energy storage associate at BNEF, said that price increases for raw materials and individual components were the main causes of the rise in cell prices seen in 2022. As battery metal prices continue to soar, the main battery and car producers have adopted much more intensive approaches to safeguard against price fluctuations, including investment in mines and refinery projects.
The time when there will be a reduction in the cost of battery metals is still a mystery. Countries in Europe as well as other countries around the world, including the United States, are attempting to reduce their reliance on China for battery supply. However, the leading producers of lithium have issued a warning about the complexities of raising production to meet the skyrocketing demand for batteries.
As things stand, the future of the EV industry could be resting in the hands of battery makers such as QuantumScape Corp. (NYSE: QS), which have to come up with ways to lower battery costs despite the rising prices of battery metals.
About Green Car Stocks
Green Car Stocks (GCS) is a specialized communications platform with a focus on electric vehicles (EV), as well as other emerging market opportunities in the green sector. The company provides (1) access to a network of wire services via NetworkWire to reach all target markets, industries and demographics in the most effective manner possible, (2) article and editorial syndication to 5,000+ news outlets (3), enhanced press release services to ensure maximum impact, (4) social media distribution via the Investor Brand Network (IBN) to millions of social media followers, and (5) a full array of corporate communications solutions. As a multifaceted organization with an extensive team of contributing journalists and writers, GCS is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. By cutting through the overload of information in today’s market, GCS brings its clients unparalleled visibility, recognition and brand awareness. GCS is where news, content and information converge.
To receive SMS text alerts from Green Car Stocks, text “Green” to 888-902-4192 (U.S. Mobile Phones Only)
For more information, please visit https://www.greencarstocks.com
Please see full terms of use and disclaimers on the Green Car Stocks website applicable to all content provided by GCS, wherever published or re-published: https://www.greencarstocks.com/Disclaimer
Green Car Stocks
Los Angeles, CA
www.greencarstocks.com
415.949.5050 Office
[email protected]
Green Car Stocks is part of the InvestorBrandNetwork.
