The Continuous Decline of Lithium-Ion Batteries Prices
The prices of battery metals have been struggling due to a surge in new production that has surpassed demand. This situation has been further exacerbated by a slowdown in the adoption of electric vehicles. A case in point is the price of Lithium, which has dropped nearly 90% since its peak in late 2022. This drastic decrease has led to mine closures and has significantly impacted the price of lithium-ion batteries used in electric vehicles.
The Evolution of Lithium-Ion Battery Prices
Data from Benchmark Mineral Intelligence provides a clear picture of how lithium-ion battery prices have evolved over the past decade.
Cathode - The Major Contributor to Battery Price
Lithium-ion batteries work by collecting current and directing it into the battery during the charging process. Typically, a graphite anode attracts lithium ions and retains them as a charge. During discharge, the cathode draws the stored lithium ions and channels them to another current collector. This circuit functions effectively because the anode and cathode do not come into direct contact and are suspended in a medium that facilitates the easy flow of ions. Currently, the cathode contributes 54% of the cell price, the anode 18%, and other components make up the remaining 28%.
The Downward Trend of Prices
The average price of lithium-ion battery cells has decreased from $290 per kilowatt-hour in 2014 to $103 in 2023. In the coming months, prices are expected to drop further due to oversupply from China.
However, despite the declining prices, battery demand is projected to increase ninefold by 2040. The battery industry’s total capital expenditure is expected to nearly triple, rising from $567 billion in 2030 to $1.6 trillion in 2040.
Bottom Line
While the current trend shows a significant drop in lithium-ion battery prices, the projected increase in demand and capital expenditure in the battery industry suggests a promising future. What are your thoughts on this development? Do you think this trend will continue, or will there be a shift in the market dynamics? Feel free to share this article with your friends and discuss it. Also, you can sign up for the Daily Briefing, which is available every day at 6 pm.
The Continuous Decline of Lithium-Ion Batteries Prices
The prices of battery metals have been struggling due to a surge in new production that has surpassed demand. This situation has been further exacerbated by a slowdown in the adoption of electric vehicles. A case in point is the price of Lithium, which has dropped nearly 90% since its peak in late 2022. This drastic decrease has led to mine closures and has significantly impacted the price of lithium-ion batteries used in electric vehicles.
The Evolution of Lithium-Ion Battery Prices
Data from Benchmark Mineral Intelligence provides a clear picture of how lithium-ion battery prices have evolved over the past decade.
Cathode - The Major Contributor to Battery Price
Lithium-ion batteries work by collecting current and directing it into the battery during the charging process. Typically, a graphite anode attracts lithium ions and retains them as a charge. During discharge, the cathode draws the stored lithium ions and channels them to another current collector. This circuit functions effectively because the anode and cathode do not come into direct contact and are suspended in a medium that facilitates the easy flow of ions. Currently, the cathode contributes 54% of the cell price, the anode 18%, and other components make up the remaining 28%.
The Downward Trend of Prices
The average price of lithium-ion battery cells has decreased from $290 per kilowatt-hour in 2014 to $103 in 2023. In the coming months, prices are expected to drop further due to oversupply from China.
However, despite the declining prices, battery demand is projected to increase ninefold by 2040. The battery industry’s total capital expenditure is expected to nearly triple, rising from $567 billion in 2030 to $1.6 trillion in 2040.
Bottom Line
While the current trend shows a significant drop in lithium-ion battery prices, the projected increase in demand and capital expenditure in the battery industry suggests a promising future. What are your thoughts on this development? Do you think this trend will continue, or will there be a shift in the market dynamics? Feel free to share this article with your friends and discuss it. Also, you can sign up for the Daily Briefing, which is available every day at 6 pm.
