EV Price Parity with ICE Vehicles by 2024?

Updated: Dec 3, 2021

Based on historical trends, BloombergNEF’s 2021 Battery Price Survey predicts that by 2024 average pack prices should be below $100/kWh. It is at around this price point that automakers should be able to produce and sell mass-market EVs at the same price (and with the same margin) as comparable internal combustion vehicles in some markets. This assumes no subsidies are available, but actual pricing strategies will vary by automaker and geography.

Lithium-ion battery pack prices, which were above $1,200 per kilowatt-hour in 2010, have fallen 89 percent in real terms to $132/kWh in 2021. This is a six percent drop from $140/kWh in 2020. Continuing cost reductions bode well for the future of electric vehicles, which rely on lithium-ion technology. However, the impact of rising commodity prices and increased costs for key materials such as electrolytes has put pressure on the industry in the second half of the year.

On a regional basis, battery pack prices were cheapest in China, at $111/kWh. Packs in the U.S. and Europe cost 40 percent and 60 percent higher, respectively. This reflects the relative immaturity of these markets, the diverse range of applications and, for the higher end of the range, low volume and bespoke orders.

However, higher raw material prices mean that in the near-term, average pack prices could rise to $135/kWh in 2022 in nominal terms. In the absence of other improvements that can mitigate this impact, this could mean that the point at which prices fall below $100/kWh could be pushed back by two years. This would impact EV affordability or manufacturers’ margins and could hurt the economics of energy storage projects.