By ESS news
Battery prices saw their biggest annual decline since 2017, with lithium-ion battery pack prices falling 20% from 2023 to a record low of $115/kWh, according to analysis from BloombergNEF (BNEF).
Factors driving this decline include overcapacity in cell production, economies of scale, low metal and parts prices, the adoption of cheaper lithium iron phosphate (LFP) batteries and a slowdown in electric vehicle sales growth.
There is currently overcapacity, with a fully commissioned battery cell production capacity worldwide of 3.1 TWh. According to BNEF, this is more than 2.5 times the annual demand for lithium-ion batteries in 2024.
“The decline in battery cell prices this year was greater compared to battery metal prices, indicating that margins for battery manufacturers are under pressure. Smaller manufacturers are particularly pressured to reduce cell prices to fight for market share,” said Evelina Stoikou, head of BNEF’s battery technology team and lead author of the report.
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