Following the onset of the pandemic in early 2020, EV battery raw materials prices skyrocketed for a number of reasons, ranging from shipping issues to limited supply to increased demand, even though most expected those prices to eventually come back down to earth. Regardless, pricing remains the biggest obstacle in the way of widespread EV adoption, and as such, Ford is embracing less expensive lithium-iron phosphate units as standard range replacements for the Ford F-150 Lightning, Ford Mustang Mach-E, and potentially other future models as well, into the next decade in fact. Regardless, Ford recently decided to delay around $12 billion in planned EV investments amid waning demand, downsizing the BlueOval Battery Park Michigan where LFP batteries will be built while also canceling plans to build another plant in Turkey. Now, some relief for high EV battery prices may be on the way, according to new data from Goldman Sachs.
A recent report from the financial institution reveals that global EV battery prices are falling a bit quicker than expected, a trend driven by cooling battery metals prices. This new piece of research indicates that global EV battery prices are now projected to decline by 40 percent by 2025, compared to 2022, or $99 per kilowatt hour (kWh) of storage capacity. Previously, Goldman Sachs expected a drop of 33 percent over that same time frame.
Roughly half of that decline in pricing will reportedly come from the quickly declining costs of raw materials used in the construction of EV batteries such as lithium, nickel, and cobalt, leading to battery pack prices that are expected to fall an average of 11 percent annually between 2023 and 2030.
This is good news for automakers and others that are heavily invested in EVs at the moment, as this means that all-electric vehicles are now expected to reach a cost parity with ICE vehicles by the middle of this decade, sans any sort of subsidies factored in. All of this is expected to help ramp up EV adoption, as Goldman Sachs expects EV penetration across the globe to reach somewhere between 47-63 percent by 2030.