The price of electric cars will soon fall to the

The price of electric cars will soon fall to the level of fossil fuel cars due to a sharp drop in battery prices

According to Benchmark Mineral Intelligence, the cost of lithium-ion batteries fell 10% in August to $98.2 per kWh, officially allowing electric vehicle makers to offer cars that are priced comparable to their ICE-based counterparts are. This is the first time such a drop in battery prices has been observed in two years.

    Image source: BYD

Image source: BYD

As is known, the traction battery can account for up to 40% of the cost of an electric vehicle, so the dynamics of prices for raw materials for the production of batteries significantly affects the availability of electric vehicles in general. According to analysts Benchmark Mineral IntelligenceSince the cost of storing 1 kWh of electricity is no more than $100, automobile manufacturers not only have the opportunity to offer electric vehicles at comparable prices to internal combustion engine vehicles, but also achieve comparable profits, which is beneficial for business and industry development is important as a whole. Of course, this statement only applies to cars in certain price ranges, as it will only become relevant for entry-level electric vehicles much later.

Ten years ago, the average cost of storing 1 kWh of electricity in electric vehicle traction batteries was $668. In March 2022 it reached $146.4 and in August this year it fell by another third from this level. According to TrendForce analysts, this market will see a gradual price decline at least until the end of this year.

The fall in the price of traction batteries this year was primarily driven by the dynamics of raw material prices. Since the beginning of the year, the price of lithium has fallen by more than 50%, and the price of nickel and cobalt has also fallen significantly. On the other hand, demand for electric vehicles is not growing as much as manufacturers expected. In the United States, for example, manufacturers had 100 days’ worth of finished electric vehicles in stock in June, more than three times the previous year’s level.

In August, geologists managed to discover a large deposit of lithium compounds on the Oregon-Nevada border – according to preliminary estimates, up to 40 million tons, making it the largest explored in the world. The lithium reserves in this one deposit alone are enough to supply the industry with lithium batteries for several decades. Elon Musk has repeatedly pointed out that lithium is widely used on our planet and the problem of the electric vehicle industry is not a lack of raw materials per se, but a lack of processing capacity. As this area of ​​activity expands, lithium batteries are likely to become generally more accessible, which is already being observed by experts.

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Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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