Good news for your wallet. The price of batteries, the central and expensive element of electric cars, is expected to fall by 40% by 2025. This drop, combined with technological innovation, could spell the end of thermal cars and propel electric vehicles towards mass adoption.
Good news for electric fans. While the CEO of Peugeot spoke of “a bloodbath” to come in the price war for electric cars, the price of batteries, the central and expensive element of EVs, should see a significant drop in the years to come. This is what the investment bank Goldman Sachs predicts in a recent publication.
EVs, soon cheaper than thermal thanks to the drop in battery prices
According to Goldman Sachs, global demand for batteries expected to grow by 29% in 2024, compared to 35% initially planned. This slight revision is explained by a particular economic context. But the American bank remains optimistic about the future of the electric car market, for several reasons.
First of all, falling prices for battery materials. Lithium and nickel, two key elements, have seen a price surge in recent years. But Goldman Sachs anticipates a return to normal, with supply catching up with demand. This drop in costs should be reflected in the price of batteries, with a forecast of 40% reduction between 2023 and 2025.
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Secondly, technological innovation. New manufacturing methods and new materials promise more efficient, more durable and more affordable batteries. Goldman Sachs cites in particular solid-state batteries, which could well revolutionize the market.
Thirdly, achieving price parity. The bank predicts that as early as this year, electric cars could reach price parity with thermal cars, without taking into account subsidies. An important step towards the mass adoption of electric, at a time when BYD is starting to offer EVs at very low prices.
It remains to be seen whether these predictions are confirmed. In the meantime, car manufacturers are increasing their efforts to offer more attractive and affordable electric models. The future of electric mobility looks promising.
- The price of electric car batteries is expected to fall by 40% by 2025.
- This decline is due to increased supply and technological innovation.
Source: CleanTechnica