Battery packs used in electric vehicles are becoming cheaper and for the first time are nearing competitive parity in terms of cost with gasoline-powered vehicles, according to a survey conducted by Bloomberg.
What Happened: The average price per kilowatt-hour (kWh) for a lithium-ion battery pack has fallen to $137 in 2020, down from $157 in 2019, a survey of 150 buyers and sellers revealed, reported Bloomberg Wednesday.
The parity level with gasoline engines is near $100/kWh. The Bloomberg survey found that batteries for e-buses in China are reported to be $100/kWh in some cases.
Battery makers are reportedly expected to reach the $101/kWh levels in 2023, which would be a significant decline from a decade ago when battery pack prices averaged more than $1,000/kWh.
Logan Goldie-Scot, an author of the report resulting from the research, said that cost-competitive EVs are inevitable in the short-term.
“For many vehicle segments, it’s in the next three or four years,” said Goldie-Scot. The research concluded that even if raw material costs return to highs seen in 2018, $100/kWh packs would see a delay of only a couple of years.
Why It Matters: The battery pack is the most expensive part of an EV and makes up for 30% of the total cost to consumers, as per Bloomberg.
Segment leader Tesla Inc (NASDAQ: TSLA) pays an estimated average of $115/kWh for batteries compared with $128/kWh it paid last year, according to the survey.
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