Report: Falling Battery Prices to Boost EV Adoption in Next Two Years

Oct. 15, 2024
The rate at which battery pack prices are falling may make electric vehicle ownership costs equivalent to that of ICE cars come 2026, according to Goldman Sachs research.

A recent study from Goldman Sachs suggests a gradual decline in battery prices may lead to a boon in EV ownership within the next two years, according to Inside EVs.

The price of lithium-ion batteries has already been on a steady decline. By the end of 2024, researchers expect global average battery pack prices to fall to $111 per kilowatt-hour. Last year, that number was $149/kWh; in 2011, it was $780/kWh.

By 2026, battery pack prices are forecasted to fall another 26% to $82/kWh: roughly half of what prices would have been just three years prior in 2023. By the end of the decade, Goldman predicts prices to reach $64/kWh.

Factors contributing to this decline in battery prices has been attributed to advances in technology allowing for more energy to be contained at a lower cost, and a decline in prices for metals like lithium and cobalt.

Goldman Sachs has noted that the 2026 estimate would mark a milestone, as it would make the cost of owning an EV equivalent to that of an internal combustion engine, free of subsidies.

As such, Nikhil Bhandari, co-head of Goldman Sachs Research’s Asia-Pacific Natural Resources and Clean Energy Research, argued that this would likely lead to more consumers pursuing EV ownership come 2026.

“We think we’re going to see a strong comeback in demand in 2026 purely from an economics perspective,” stated Bhandari in the report. “We believe 2026 is when a consumer-led adoption phase will largely begin.”

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