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Price of Lithium-ion Battery Pack through 2010 – 2021

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  • Xavier Sabastian
  • 3 minutes

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In 2021, the price of the lithium-ion battery packs for electric vehicles dropped to $157 per kWh. This is continuing decades of cost reductions. However, it may rise this year as higher material prices further catch up to cost reductions.

In the auto industry, $100 per kWh for lithium-ion battery packs is usually the cost-competitive price point for electric vehicles. Of course, this is dependent on the type of car, as several segments can produce cost-competitive EVs with higher battery costs. The average cost of electric vehicle batteries has been steadily decreasing through 2021.

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Lithium-ion prices have dropped 269%, from $579 per kilowatt-hour in 2011 to $157 per kWh in 2021. Continuing cost reductions promise well for the future of lithium-ion technology-based electric vehicles.

Lithium-ion price through 2010 to 2021

Will the price of Lithium-Ion continue to drop?

However, because of rising material costs, these consistent cost reductions may end in 2022. Because of the rising raw material prices, average lithium-ion prices could rise to $171/kWh in nominal terms in 2022. In the absence of other improvements, this might mean that the time at which prices fall below $100/kWh will be delayed by two years. This would influence EV affordability and margins and the economics of energy storage projects.

Will the prices of Lithium-Ion rise? If so, why?

In 2021, the prices of critical metals in battery production climbed dramatically, putting upward pressure on battery costs. The rise in demand is outpacing the arrival of new products, which takes a long time to set up because mining is a capital-intensive and time-consuming sector.

Each EV battery pack contains multiple interconnected modules containing tens to hundreds of rechargeable Li-ion cells. Around 77 percent of the total cost of a typical battery pack is made up of these cells, or roughly $101/kWh.

So, what factors impact the pricing of a single battery cell?

Will the prices of Lithium-Ion rise?

The Cost of an EV Battery Cell

The cathode cost of each cell accounts for more than half of the total cell cost.

EV Battery Cell Component % of Cell Cost
Cathode 51%
Manufacturing and depreciation 24%
Anode 12%
Separator 7%
Electrolyte 4%
Other materials 3%

The Reason why Cathodes are Expensive?

The positively charged electrode of the battery is the cathode. When a battery is drained, electrons and positively charged molecules (lithium ions) flow from the anode to the cathode, where they are stored until the battery is charged again.

Cathodes are Expensive

As a result, cathodes are one of the essential components since they determine an EV’s performance, range, and thermal safety. The following are cathode compositions:

  • Iron phosphate (LFP)
  • Nickel manganese cobalt (NMC)
  • Nickel cobalt aluminum oxide (NCA)

Battery metals, which make up the cathode, are in great demand. Automakers like Tesla scrambling to secure supplies as EV sales soar. Indeed, the cathode’s commodities and those in other cell portions contribute to around 40% of the total cell cost.

Essential components of Lithium Ion battery

Other EV Battery Cell Components

The remaining 49% of a cell’s cost comprises non-cathode components. The manufacturing process, which includes making the electrodes, putting the components together, and finishing the cell, accounts for 24% of the entire cost. Another critical battery component is the anode, which accounts for 12% of the total cost—roughly one-fourth of the cathode’s portion. 

A Li-ion cell’s anode is usually made of natural or synthetic graphite, which is less expensive than other battery materials. Even though battery costs have been dropping since 2010, a recent spike in the price of crucial battery metals like lithium has cast doubt on their future. 


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