EV battery costs plummet 90% since 2008 latest data shows

The electric vehicle market has undergone a remarkable transformation in the last fifteen years. What was once a niche and expensive product is rapidly becoming mainstream, thanks in large part to a dramatic reduction in the cost of its most crucial component: the battery.

A new study by the US Department of Energy's Vehicle Technologies Office reports a staggering 90% decline in the cost of EV batteries between 2008 and 2023. This translates to a drop from $1,415 per kilowatt-hour to just $139/kWh. Even when accounting for inflation, the price reduction is impressive.

To put this in perspective, consider the popular Tesla Model Y, with its 82 kWh battery pack. In 2008, this battery alone would have cost over $114,000. Today, the same battery costs just over $11,000. That's a difference of over $100,000, demonstrating the impact these cost reductions should have on the affordability of EVs.

Several factors have contributed to this dramatic price drop. Advances in battery technology and chemistry, improved manufacturing processes, and increased production volumes have all played a role.

The automotive industry is optimistic that this trend will continue. Market analysis firm Gartner predicts that by 2027, electric cars will be cheaper to produce than their ICE counterparts, which should make them the default choice for new customers.

Combined with lower ownership costs, such as reduced fuel and maintenance expenses, EVs are already becoming an increasingly attractive option. A recent study by JD Power found that in 48 out of 50 US states, the total cost of owning an EV over five years is already lower than owning a comparable ICE vehicle.

While the global EV market has experienced some slowdowns lately, the long-term outlook remains extremely positive. The battery cost reductions have the potential to transform the automotive landscape, making electric cars not just a greener choice but also a more affordable one.

Via