Everything You Need to Know About Lithium-Ion Battery Market Prices

The Lithium-Ion battery is a hot commodity today. As per one of the leading market reports, the Li-ion battery market was valued at $36.7 billion in 2019 and is expected to reach $129.3 billion by 2027.

The market is expected to grow at a compound annual rate of 18% from 2020 to 2027. This growth in the lithium-ion battery market is mainly due to its increased use in the automotive sector in electric and hybrid vehicles.

The product will also see an increase in other electronics and electronic industry sectors due to the increased penetration of smartphones and laptops. Many people wonder what will be the effect of the lithium-ion battery price. Read on to know more.

Li-Ion battery prices have decreased in the last ten years

The popularity of Li-ion batteries has been increasing since the last decade. If you see the past pricing data, you would be surprised to know the lithium-ion battery price has fallen despite the rise in demand.

If you take a closer look at the price data from 2010 to 2018, you will notice that the weighted average battery pack has fallen by a staggering 85%. It has reached an average price of $176 per kWh.

Current Li-ion battery prices are far lower

If you delve deep into the pricing data and check the actual prices, you will notice the current Li-ion battery prices are far lower than $176 per kWh. The reason for this price difference is many. Several types of li-ion batteries in the market and smaller types and related volumes do not make a market.

Large electric car manufacturers like Tesla dominate the Li-ion battery market, and its publicly stated prices are primary sources to reach an average. They are generally weighted on the volumes sold. The Li-ion market price is affected by the volume of batteries shipped to Tesla.

Other battery manufacturers might have lower prices, but they never make to the market data price feed due to lower volumes.

Current Li-ion battery prices might be higher

There is a contrasting view presented by some businesses in the middle of the battery procurement process. According to experts, they cannot secure prices with the manufacturer that we have disclosed in the post. There are several reasons for this. These buyers do not have clout like Nissan or Volkswagen when it comes to price negotiations.

This might be one of the reasons for these businesses procuring li-ion batteries at a higher price. Other reasons are vehicle type, design, and type of cooling required. A heavy-duty battery which is fitted in large vehicles has a different design and requirements.

It will be different from batteries included in smaller passenger vehicles though several everyday things exist between the two. Car manufacturers are ready to pay for specific battery characteristics. According to market experts, these manufacturers are also likely to benefit from falling prices soon.

Batteries prices are expected to fall more than forecasting

The main price-determining factor for the forecast is volume. Since there is a tremendous demand for Li-ion batteries in different industries, the prices will fall. The price forecasting also considers the past data from 2010 to 2018, which shows an 85% decline in prices.

Based on both factors, li-ion battery prices may fall from $176 per kWh to $94 per kWh by 2024. By the year 2030, the li-ion battery’s average price will be around $62 per kWh. You need to understand the price forecasting is about average price.

Some companies with huge volumes might offer lower than forecasted prices, while some companies with lesser volumes are likely to sell at higher prices. Larger forecast volumes could drive the prices lower in the future.

For example, the market experts are always looking for new announcements that could increase the sale volumes of li-ion batteries.

Batteries prices might be increasing and not falling

This is a contrasting view presented by some market experts. The reason behind this is that Li-ion batteries’ prices also depend on factors like prices of base metals used and profit margins. If the prices of base metal rise, it also leads to an increase in the price of Li-ion batteries.

Some manufacturers also want an increase in profit margins that leads to an increase in li-ion batteries prices. These are some of the trends you need to know about li-ion battery prices. The battery technology is improving, and we might see different pricing trends altogether than discussed above.