EV battery prices set to plummet, dramatic 50% drop predicted by 2026

[Alfonso Maruccia]

Green if true: Advances in technology and reductions in the cost of battery metals will soon bring electric vehicles to price parity with traditional cars, according to Goldman Sachs. However, this forecast overlooks current issues with oversupply, environmental impact, and China's export restrictions on rare-earth elements.

Goldman Sachs is highly optimistic about the future of electric vehicle batteries. The financial giant recently released new research focused on EV batteries, predicting that battery prices will drop by nearly 50 percent within the next few years. The technology is advancing much faster than initially anticipated.

The EV market is currently experiencing a phase of apparent oversupply, which might seem like bad news for battery tech. However, Goldman Sachs Research is forecasting a resurgence in consumer demand that will "largely begin" by 2026.

Global average prices for EV batteries have already seen a decline, falling from $153 per kilowatt-hour (kWh) in 2020 to $149 in 2023. This year, prices are expected to drop further to $111 per kWh, and by 2026, they are projected to reach just $80. In two years, EV batteries will cost nearly 50 percent less than they did in 2023, bringing electric vehicles to ownership cost parity with gasoline-powered vehicles in the US – and that's before factoring in subsidies.

Nikhil Bhandari, co-head of Goldman Sachs' Asia-Pacific Natural Resources and Clean Energy Research arm, said two key factors are driving the rapid decline in EV battery costs.

First, technological innovation is significantly increasing energy density. Many products now feature up to 30 percent higher energy density at a lower cost, with several of these innovations already available on the market.

The second major factor is the "continued downturn in battery metal prices," Bhandari noted. Critical elements like lithium and cobalt, which account for around 60 percent of the cost of EV batteries, have experienced price reductions. Between 2020 and 2023, the industry faced substantial "green inflation," with prices rising across the board for many materials.

According to Bhandari, 40 percent of the cost reduction is attributed to lower commodity prices. However, he did not elaborate on how geopolitical tensions between the US and China could significantly disrupt market progress. China controls some of the world's largest deposits of rare earth elements and is now using its dominant position to push back against export restrictions imposed by US authorities.

Goldman Sachs' research also highlighted that lithium-based batteries will likely continue to dominate the market, despite emerging alternatives like solid-state batteries offering potentially revolutionary improvements to the EV landscape. Five companies currently control 80 percent of the EV battery market, and their substantial R&D investments will likely maintain high barriers to entry for potential competitors.

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EV battery prices set to plummet, dramatic 50% drop predicted by 2026

 

[WhiteLeaff]

Yeah, LFP cells have already fallen to 1/4 of their value in recent years, approaching $50-60/kWh, but if you look around power stations and EVs they're still almost the same price.

My thesis is that companies will simply incorporate this into their profit margin rather than passing on the discount in the final price. And it's going to get even worse with the US and Europe blocking competition with retarded protectionist tariffs, going against the very inflation targets and supposed green agenda they pursue.

 

[SRB]

Yeah, LFP cells have already fallen to 1/4 of their value in recent years, approaching $50-60/kWh, but if you look around power stations and EVs they're still almost the same price.

My thesis is that companies will simply incorporate this into their profit margin rather than passing on the discount in the final price. And it's going to get even worse with the US and Europe blocking competition with retarded protectionist tariffs, going against the very inflation targets and supposed green agenda they pursue.

Profit margins???? To the best of my knowledge, only Tesla has any profit. Ford has encountered record losses with EV. GM is in the same boat, and none of them are remotely affordable, and several EV makers have gone under. Unless it's a complete commodity crash, I doubt it will have the rosy results Goldman envisions.

 

[WhiteLeaff]

Profit margins???? To the best of my knowledge, only Tesla has any profit. Ford has encountered record losses with EV. GM is in the same boat, and none of them are remotely affordable, and several EV makers have gone under. Unless it's a complete commodity crash, I doubt it will have the rosy results Goldman envisions.

They are just inefficient companies that have no place in the future market, pure EV companies are BYD and Tesla.

 

[toooooot]

I believe they can, but are these new prices sustainable?
I feel like automakers will be asking for no import tax on their EVs made in China or Mexico.
Personally, I still think that EVs will crash gasoline cars when they offer budget cars with inexpensive battery that can do 300+ miles, and a kicker warranty. They can be attractive for a lot of people, just not at this level of tech and pricing.

 

[Theinsanegamer]

Somehow, I have 0 reasont o believe that this will result in lower prices as opposed to more profits for the big car companies. Despite incorporating touchscreens instead of physical controls "because they are cheaper" and switching to smaller turbo engines that are substantially cheaper to produce and maintain, and constantly removing, upcharging, or hiking the price on options, car prices and part prices have only gone up up up up.

The ford maverick started at $20k three years ago. It now starts at $28k. The XLT, with the lux interior package and 4k tow, has gone from $26k to $33k, and you've lost the de icing windshield, the standard spray in bedliner, the adaptive crusie control, and the lane centering assist. The last one now is an up-charge for co pilot 360, and the ACC only comes on the lariat. The 25s jack up the price yet again, and further upcharge for the hybrid, and now the keypad, which was already downgraded from a wired model to a disposable battery operated design, now is an additional $400 charge.

And before someone chimes in "but muh UAW labor hur dur" while spitting out their cheerios, the maverick is made in Mexico.

Somehow, I see no way short of an economic collapse that car prices every come down. As @WhiteLeaff pointed out, the tariffs on cheaper EVs will only create another protectionist market to allow gouging, same thing that's happened in the midsize and compact truck markets since the passing of the Chicken Tax in 1964.

 

[Mr Majestyk]

So will people wanting home batteries kept getting gouged. Tesla Powerwall has not decreased in price since it first came out, still looking at $14K+. Same crappy battery tech as cars.

 

[scoffer]

Somehow, I have 0 reasont o believe that this will result in lower prices as opposed to more profits for the big car companies. Despite incorporating touchscreens instead of physical controls "because they are cheaper" and switching to smaller turbo engines that are substantially cheaper to produce and maintain, and constantly removing, upcharging, or hiking the price on options, car prices and part prices have only gone up up up up.

The ford maverick started at $20k three years ago. It now starts at $28k. The XLT, with the lux interior package and 4k tow, has gone from $26k to $33k, and you've lost the de icing windshield, the standard spray in bedliner, the adaptive crusie control, and the lane centering assist. The last one now is an up-charge for co pilot 360, and the ACC only comes on the lariat. The 25s jack up the price yet again, and further upcharge for the hybrid, and now the keypad, which was already downgraded from a wired model to a disposable battery operated design, now is an additional $400 charge.

And before someone chimes in "but muh UAW labor hur dur" while spitting out their cheerios, the maverick is made in Mexico.

Somehow, I see no way short of an economic collapse that car prices every come down. As @WhiteLeaff pointed out, the tariffs on cheaper EVs will only create another protectionist market to allow gouging, same thing that's happened in the midsize and compact truck markets since the passing of the Chicken Tax in 1964.

Any chance of someone translating this into English please, for an old geezer??

"but muh UAW labor hur dur"

 

[yRaz]

Somehow, I have 0 reasont o believe that this will result in lower prices as opposed to more profits for the big car companies. Despite incorporating touchscreens instead of physical controls "because they are cheaper" and switching to smaller turbo engines that are substantially cheaper to produce and maintain, and constantly removing, upcharging, or hiking the price on options, car prices and part prices have only gone up up up up.

The ford maverick started at $20k three years ago. It now starts at $28k. The XLT, with the lux interior package and 4k tow, has gone from $26k to $33k, and you've lost the de icing windshield, the standard spray in bedliner, the adaptive crusie control, and the lane centering assist. The last one now is an up-charge for co pilot 360, and the ACC only comes on the lariat. The 25s jack up the price yet again, and further upcharge for the hybrid, and now the keypad, which was already downgraded from a wired model to a disposable battery operated design, now is an additional $400 charge.

And before someone chimes in "but muh UAW labor hur dur" while spitting out their cheerios, the maverick is made in Mexico.

Somehow, I see no way short of an economic collapse that car prices every come down. As @WhiteLeaff pointed out, the tariffs on cheaper EVs will only create another protectionist market to allow gouging, same thing that's happened in the midsize and compact truck markets since the passing of the Chicken Tax in 1964.

Well, stellantis(Dodge) is the first auto maker to be going down. They have the most unsold inventory out of all the big 3, but everyone has tons of inventory sitting on their lots right now. They all over produced because of the covid money train and now can't sell at their record high prices. On top of this, noone has any money and it's harder to get loans.

We will see a correction here shortly. Tons of cars sitting on lots that noone can afford and basically all of them were built based on covid sales numbers.

 

[FaTaL]

Still not buying a fcking EV

 

[Brickwizard]

I think I will continue with my Diesel motor, until Hydrogen is perfected, besides the nearest public charging point I know of, is 4 miles from my village

 

[Hom3r]

Plummet, nah. Price already dropped alot from 2 years ago and it is not really getting much cheaper from here.

Lets say prices did actually drop alot, then demand will go up and drive prices up again. Just look at the image in this article. Car demand went up in 22 and 23, so did battery prices.

Demand dropped in 24 again, prices dropped...

It is all about balance, like everything else.

 

[mbk34]

I think I will continue with my Diesel motor, until Hydrogen is perfected, besides the nearest public charging point I know of, is 4 miles from my village

Most people with EVs just plug them in at home. A 7kw home charger will top up most EVs overnight. You can wake up to a full tank each day. Filling the battery from empty on an average Tesla would costs around $10.

I don't think hydrogen is the answer. If you use electricity to generate the hydrogen then ship it to filling stations then surely it's better, and way more efficient, to just use the electricity direct? And if you use methane etc to generate the hydrogen then you're generating all sorts of green house gasses. Also, how close is your nearest hydrogen filling station?

 

[mbk34]

Still not buying a fcking EV

Some folk just don't like the idea of 0-60 times of under 3 seconds, of vehicles with almost zero maintenance, of filling up at home for $10 and waking up to a full tank each day or of driving around in near silence. Here in the UK though we won't be able to buy new ICE engined cars after 2030.

 

[seeprime]

I believe they can, but are these new prices sustainable?
I feel like automakers will be asking for no import tax on their EVs made in China or Mexico.
Personally, I still think that EVs will crash gasoline cars when they offer budget cars with inexpensive battery that can do 300+ miles, and a kicker warranty. They can be attractive for a lot of people, just not at this level of tech and pricing.

If the 300+ miles also holds is for snowy freezing climates, instead of dropping closer to 200 miles, it stands a chance. Otherwise, there's no point at this time.

 

[Brickwizard]

just plug them in at home.

That's fine and dandy if you have a house with parking alongside, no good if your in a second floor flat [apartment] and no good to me as we have designated parking and my bay is about 50 ft from the house

 

[Achaios]

Still not buying a fcking EV

Yeah, me neither. They will have to pry my gasoline powered car keys from my cold dead hands b4 I part with it.

I'd rather spend 30 months in Thailand with that $30K than pay the suits to buy their overpriced EV crap.

 

[toooooot]

Yeah, me neither. They will have to pry my gasoline powered car keys from my cold dead hands b4 I part with it.

I'd rather spend 30 months in Thailand with that $30K than pay the suits to buy their overpriced EV crap.

"proper" gas tax would make you change your mind.
Taking things from people is stupid when you can just make owning them unbearable.

 

[mbk34]

If the 300+ miles also holds is for snowy freezing climates, instead of dropping closer to 200 miles, it stands a chance. Otherwise, there's no point at this time.

You're quite right, current batteries aren't brilliant in freezing climates.

That's fine and dandy if you have a house with parking alongside, no good if your in a second floor flat [apartment] and no good to me as we have designated parking and my bay is about 50 ft from the house

Again, EVs probably aren't for you especially if you do high miles and need a reliable nearby place to charge. You could try asking your apartment manager for charging bays. Most cities already have street charging and places like Walmart offer free charging. Charging at work can sometimes be a possibility. Zapmap is a website that shows where you're nearest charger might be.

I'd rather spend 30 months in Thailand with that $30K than pay the suits to buy their overpriced EV crap.

Buy 2nd hand and pay $10-20K.

 

[Brickwizard]

You could try asking your apartment manager

we do not have any charging points in our VILLAGE as I said the nearest one is about 4 miles away [and that is a single point in a pub car park], and there are none-on the communal parking on our private estate

 

[lonetac]

Yes, technology tends to get cheaper over time. This isnt shocking.

 

[Puiu]

Profit margins???? To the best of my knowledge, only Tesla has any profit. Ford has encountered record losses with EV. GM is in the same boat, and none of them are remotely affordable, and several EV makers have gone under. Unless it's a complete commodity crash, I doubt it will have the rosy results Goldman envisions.

Can you really call Tesla "profitable" when half of it is just from government subsidies and they even had to cut 10% of the workforce? Their profit margins have tanked in the last year. Tariffs on imports is the main reason he supports Trump (and the fact that he hates his transgender child ).

 

[mbk34]

we do not have any charging points in our VILLAGE as I said the nearest one is about 4 miles away

Apologies, I meant ask the apartment manager to install charge points. This is fairly common practice in this part of the world. Our local councils are also fairly willing to install street chargers if requested. These are free to request but cost slightly more to use than your home electricity provider.

 

[Theinsanegamer]

"proper" gas tax would make you change your mind.
Taking things from people is stupid when you can just make owning them unbearable.

If the only way your new tech can thrive is to aggressively snuff out the competition via heavy taxation, your new tech sucks dic.

they didnt have to tax horses for gasoline cars to catch on.

Any chance of someone translating this into English please, for an old geezer??

"but muh UAW labor hur dur"

People love blaming the UAW for their expensive cars when A: the cars in question are being built in mexico without UAW labor and B: said labor only makes up 15% of the total cost of a vehicle and C: the company in question was raking in record profits.

As a result, they come across as rather...challenged.

Most people with EVs just plug them in at home. A 7kw home charger will top up most EVs overnight. You can wake up to a full tank each day. Filling the battery from empty on an average Tesla would costs around $10.

There are tens of millions of American households that have no place to do so. Condos, apartments, urban homes without garages.

For them, they have to use public chargers to maintain a vehicle, which are often out of the way and WAY more expensive then gas stations.

I don't think hydrogen is the answer. If you use electricity to generate the hydrogen then ship it to filling stations then surely it's better, and way more efficient, to just use the electricity direct?

Hydrogen makes way more sense for larger vehicles. Even 1/2 ton pickups are showing the severe limitations of EVs, the silverado weighs what, 9000 pounds? 3k more then the big gassers.

so for trucks, 1/2 ton and larger, hydrogen shows a lot more promise for an actual usable design. Batteries are not the end all, especially once weight limits are taken into account.

And if you use methane etc to generate the hydrogen then you're generating all sorts of green house gasses. Also, how close is your nearest hydrogen filling station?

Remind me where the majority of the electricity for your EV comes from? Oh right, coal and nat gas. Dont those give off green house gasses?

You knwo what they say about those in glass houses....

 

[ANDROIDSAHIB]

In other news, ev companies will double down on the inkjet printer model and now will make 600% profit on replacement batteries.