The price of electric car batteries is now only 1/10 of what it was 15 years ago

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Hà Linh

14/08/2024 04:00 GMT+10

Electric cars are no longer a privilege for the affluent (Image: Hyundai).

According to a new survey by the US Department of Energy's Vehicle Technologies Office, the price of electric car batteries has dropped by up to 90% from 2008 to 2023, narrowing the price gap between gasoline and electric cars for automakers.

One of the most important factors in electric vehicle production is the size, weight, and cost of the battery pack. Battery prices have continuously declined over the past decades thanks to technology advancements, developments in the chemical industry, new production processes, and increased production scale.

According to the US Department of Energy, the price of lithium-ion batteries has dropped from $1,415/kWh in 2008 to $139/kWh in 2023. The difference wouldn't be as significant if inflation is taken into account over the 15-year period, with the 2008 battery price at approximately $1,000 when adjusted for current USD rates. However, the price of electric car batteries has still significantly decreased, especially during the 2009-2013 period.

This calculation applies to passenger cars with a production volume of at least 100,000 vehicles per year. Therefore, the 81kWh battery pack of a Tesla Model Y would have cost $114,615 in 2008, compared to $11,259 in 2023.

Chart of electric car battery prices in the US from 2008 to 2023, with the dark blue line showing prices in current USD and the light blue line showing prices adjusted for inflation (Source: US Department of Energy's Vehicle Technologies Office).

Automakers expect battery prices to continue to decline in the coming years, enabling them to produce affordable electric vehicles. A study by market analysis firm Gartner suggests that electric cars will be cheaper than gasoline cars by 2027. Meanwhile, many companies predict that electric cars will be as cheap as gasoline cars by the end of this decade.

According to a recent survey by JD Power, in 48 out of 50 states in the US, the total cost of owning an electric car over 5 years is now cheaper than owning a gasoline car.