Lithium-ion battery prices have dropped significantly over the past decade, but that trend may not continue as the “demand tsunami is approaching.”
As noted by CNBC, eSource estimates that “battery cell prices will increase by 22% from 2023 to 2026, peaking at $ 138 (£ 111 / € 130) per kilowatt-hour.” If that prediction comes true, it will be a significant increase as battery cell prices are currently expected to drop to around $ 128 (£ 103 / € 121) per kilowatt hour and about $ 110 (£ 88 / € 104) per kWh next year.
Although the numbers seem relatively small, you should keep in mind that many electric vehicles have battery packs with a capacity of 60-100 kWh. As a result, prices are rising rapidly, and this means that the EV sold in 2026 could cost an additional 500 1,500 to $ 3,000 (£ 1,203 – £ 2,406 / € 1,418 – € 2,835), according to the firm’s estimates.
Also read: Lithium-ion battery prices fell 6% last year, but the problem is on the horizon
Prices are expected to rise for a variety of reasons, including rising demand and limited supply of lithium. It has already skyrocketed the price of lithium by almost 900% in the last year and a half, but as e-source noted, it was wrong to assume that “capital markets will open floodgates to set up dozens of new lithium mining projects.” The Chinese supply chain came from China. “
While price increases are never welcome, eSource believes things will get better in the end. They expect prices to start declining in 2027 and continue to decline until 2031, when they could drop to $ 90 (£ 72 / € 85) per kilowatt hour.