With the continuous advancement of technology, the development of electric vehicles has attracted increasing attention from people. However, the high cost of batteries has long been a major obstacle to the widespread adoption of electric vehicles. The high price of newly purchased electric vehicles, coupled with concerns about the cost of replacing used car batteries, has led many consumers to adopt a wait-and-see attitude when choosing whether to purchase an electric vehicle.
However, the good news is that the issue of high replacement costs for electric vehicle batteries will be significantly improved over time.
Recurrent is a company that specializes in providing battery health reports for used electric vehicles. The company predicts that by the end of this century, the sharp drop in new battery prices will make the cost of replacing battery packs lower than the cost of repairing gasoline engines. This is based on the following estimates: reduced cost of battery metals, cheaper chemicals such as lithium iron phosphate, higher energy density of battery packs, and recycling and reuse of mining materials.
Whether it is a gasoline engine, battery pack, or any other component, if the repair cost exceeds the value of the car itself, it is economically unreasonable. Recurrent indicates that the cost of battery replacement has deviated from this level.
The company estimates that battery replacement costs currently account for 75% of the value of a $15000 used car, down from 100% in 2020, and adds that by 2030, battery replacement costs will be equivalent to 30% of the value of a $15000 used car.
Coincidentally, Goldman Sachs recently released a report stating that by 2026, the price of batteries is expected to drop to $80 per kilowatt hour, which is only about half of the price in 2023. In just three years, the cost has been able to achieve such a significant reduction, undoubtedly providing a huge driving force for the popularization of electric vehicles.
The decline in battery prices not only means that the price gap between new electric vehicles and gasoline vehicles will gradually narrow, but more importantly, it will bring revolutionary changes to the second-hand electric vehicle market and battery replacement. Because for second-hand electric vehicles, the health condition of the battery and potential replacement costs have always been a hidden concern for consumers.
But with the decrease in battery prices, all of this will become less worrying. Battery replacement will become more cost-effective, and may even be lower than the cost of replacing an internal combustion engine. In addition, compared to fuel vehicles with hundreds of vulnerable moving parts, electric vehicles have much fewer worn parts, which means they will be more worry free in terms of maintenance.
It is worth mentioning that battery replacement is not necessary frequently and usually comes with special battery warranty services, with a warranty period often lasting up to 8 years or exceeding 100000 miles. In fact, the expected lifespan of lithium-ion batteries can reach 200000 miles or even longer. Therefore, consumers do not need to overly worry about the durability of the battery when purchasing electric vehicles.
Goldman Sachs' report further predicts the future trend of battery prices. By 2030, the price of battery packs may drop to $64 per kilowatt hour. However, this prediction is still relatively high compared to estimates from other institutions.
For example, industry leader RMI predicted in a report released in January 2024 that by 2030, battery prices will drop to $32-54/kWh, or battery pack prices will be $45-65/kWh.
However, during 2024, CATL began offering lithium iron phosphate as low as $56/kWh, followed closely by BYD. This summer, the Clean Energy Association predicted that by 2028, the global lithium-ion battery market will still be oversupplied, which means prices may even be lower than expected
Industry insiders suggest that if the forecast for battery prices in 2030 is optimistic, the target price of $35/kWh is likely to be achieved. This means that the price of the battery pack will reach or fall below $50 per kilowatt hour.
For consumers, this means that the cost of replacing a large battery pack may only be $4500-5000, while the replacement cost of a more standard 75 kWh battery pack may drop to around $3375, which is comparable to the cost of replacing an engine.
Goldman Sachs detailed in its report the reasons for the decrease in electricity prices per kilowatt hour: "Battery metal prices continue to decline. This includes lithium and cobalt, with nearly 60% of battery costs coming from metals... More than 40% of the decline is only due to the decrease in commodity costs, as we experienced significant green inflation between 2020 and 2023
In addition, with the continuous development and growth of the second-hand battery market, savvy consumers may be able to further reduce the cost of replacing battery packs by reselling old batteries. This will make the cost of owning electric vehicles lower, thereby attracting more consumers to choose electric vehicles as their means of transportation.
In summary, the decrease in the price of electric vehicle batteries will bring a series of positive impacts. It will not only gradually eliminate the price gap between new electric vehicles and gas vehicles, but also bring unprecedented opportunities for the second-hand electric vehicle market and battery replacement. There is reason to believe that electric vehicles will become a more affordable, environmentally friendly, and reliable travel option. And all of this is due to the continuous advancement of battery technology and the continuous reduction of costs.
浙公网安备33038102332475号
English
Chinese
