EV Battery Pack Costs Have Dropped 90 Percent Since 2008

It’s not exactly a secret that one of the biggest barriers standing in the way of more widespread EV adoption remains the high cost disparity between those models and traditional ICE-powered vehicles. The main reason behind this large gap lies in the costs of producing an EV battery pack and the raw materials that make it, after all. However, a new report indicates that the costs of making an EV battery pack have dropped significantly over the past few years.

The Department of Energy (DOE) Vehicle Technologies Office just released new estimates pertaining to the cost of lithium-ion battery packs for light-duty EVs, and found that those costs declined by a whopping 90 percent between 2008 and 2023 – $139/kWh on a usable-energy basis for production at scale of at least 100,000 units per year, compared to to $1,415/kWh in 2008. This sharp decline is attributed to improvements in battery technology and chemistry, an increase in production volume, and more efficient manufacturing processes.

This drop isn’t entirely unexpected, however, as back in May 2021, Ford revealed that it expected battery costs to decrease by 40 percent by the middle of this decade. As Ford Authority reported last November, that data is backed up by Goldman Sachs research that found global EV battery prices are now projected to decline by 40 percent by 2025, or by $99 per kilowatt hour (kWh) of storage capacity. Previously, the financial firm expected a drop of 33 percent over that same time frame.

High battery costs are reportedly what prompted The Blue Oval to delay the production start date of its planned three-row all-electric Ford Explorer for North America, as the automaker awaits more affordable units to arrive. Regardless, even with this good news, Ford CEO Jim Farley still doesn’t expect EV cost parity to occur until 2030.

We’ll have more on the state of EV battery prices soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.