Chart: Lithium-ion battery prices fall yet again

Canary Media’s chart of the week translates crucial data about the clean energy transition into a visual format. Canary thanks Clean Energy Counsel for its support of the column.

Nothing is certain except death, taxes — and the steady decline in the cost of clean energy technologies.

That includes batteries. The average price of a lithium-ion battery pack fell 20 percent this year to $115 per kilowatt-hour — the biggest drop since 2017, according to clean energy research firm BloombergNEF’s newly released annual survey.

Lithium-ion batteries are key to the energy transition. They power electric vehicles and e-bikes and store carbon-free solar and wind power for on-demand use.

For decades, these batteries have been on a so-called learning curve, meaning their costs have dropped every time the number of batteries deployed in the real world has doubled. Add up those steady decreases over time and the result is dramatic: In 2010, battery-pack prices were $1,436, per BloombergNEF — more than 12 times higher than they are today.

This rapid cost reduction has in turn enabled the ongoing batteryification of everything.

Worldwide, one in five new cars sold this year will be battery-powered, per International Energy Agency estimates; in 2018, just 2 percent of new vehicles sold were EVs. Electric two- and three-wheelers have taken off in many countries over the last decade, most notably China, India, and Vietnam. In the U.S., there’s been a surge in both grid-scale storage and backup batteries for homes equipped with rooftop solar. Startups are manufacturing battery-powered induction stoves. Disney and Netflix are working with clean energy group RMI to try out batteries as replacements for dirty diesel generators on film sets.

One big reason for 2024’s price decline was expanded competition between battery manufacturers at a time when demand for EVs — and thus batteries — has been weaker than once expected, BloombergNEF writes. In response, manufacturers jockeyed for market position by offering bargain-bin prices. Other factors contributed, too: Key metals prices plummeted, the cheaper (and safer) lithium iron phosphate chemistry became more popular, and good old-fashioned economies of scale helped manufacturers improve efficiency.

Notably, this year marked the first time the average passenger-EV battery price dipped below $100 per kWh — ​“an oft-cited rule of thumb for where EVs reach price parity” with gas cars, per BloombergNEF. Prices for passenger-EV batteries fell 27 percent this year.

It’s not just lithium-ion batteries that are gliding down the learning curve. Solar and, to a choppier extent, wind have also seen their prices free-fall over time. These ever-improving economics make it easier every year to adopt clean energy and EVs — and harder and harder to argue against them. 

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