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<p>Average lithium-ion (Li-ion) battery cell cost will fall below $100/kWh in the next three years, while improved cheaper technologies and economies of scale will drive it down to $73/kWh by the end of 2030, according to a recent analysis by IHS Markit.</p>
<p>Significant contributors through the decade will be lower manufacturing costs derived from larger capacities. Low-cost cathode compositions and higher energy density will improve efficiencies making cells cheaper. Prices will fall as Li-ion batteries find extensive use in powering electric vehicles and provide resilience to power grids following large renewable generation capacity addition, according to the analysis.</p>
<p>“Cost is the name of the game. Technology advances and competition between different types of lithium-ion batteries are driving prices down,” says Youmin Rong, senior analyst at <a href="https://ihsmarkit.com/industry/energy.html" target="_blank" rel="noopener noreferrer">IHS Markit</a>.</p>
<p>The firm estimated the average cost of batteries to have declined 82% since 2012. By 2023, this decline would reach 86% in a decade. Further cost reduction is vital in increasing competitiveness, broader adoption in electric transport, and in-grid storage.</p>
<p>“Progress in growing the share of low-carbon generation, such as solar and wind, in the global power mix, also brings a particular set of challenges—intermittency,” said Sam Wilkinson, associate director, clean energy technology at IHS Markit. “Improving the cost-effectiveness of energy storage, particularly batteries, will be key to providing needed flexibility to balance this supply of electricity with demand,” he added.</p>
<p>The cost of the Iron Phosphate (LFP) variant of li-ion batteries is already below $100/kWh. LFP price will remain lower than other available variants throughout the current decade, according to the analysis.</p>
<p>Costs of two other variants, Nickel Manganese Cobalt (NMC) and Nickel Cobalt Aluminum (NCA), are expected to fall below $100/kWh in four years. These will continue to command a majority share of the automotive and transport market due to their higher energy density.</p>
<p>Meanwhile, Chinese lithium-ion battery manufacturers are likely to retain their recently acquired number one position in the next five years, predicts a recent Bloomberg New Energy Finance’s (BNEF) ‘Global Lithium-Ion Battery Supply Chain <a href="https://mercomindia.com/china-leads-lithium-ion-battery/" target="_blank" rel="noopener noreferrer">Ranking</a>. The ranking offers a snapshot of a country’s position in 2020 and indicated 2025 global rankings based on its current development trajectory. China secured the position recently by surpassing decade-old dominant players Japan and Korea, which are now in the second and third positions.</p>
<p>Battery energy storage companies <a href="https://mercomindia.com/battery-energy-storage-funding-1h-2020/" target="_blank" rel="noopener noreferrer">received</a> $536 million in VC funding in 1H of 2020, and Lithium-ion technology received most of this funding to date.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/debjoy-sengupta/" class="vcard author" rel="author"><span class="fn">Debjoy Sengupta</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="authorboxn" style="padding-bottom: 20px"><a href="#" target="_blank" rel="noopener"><strong style="color: #00b451">Debjoy Sengupta</strong> </a>is a research analyst at Mercom India Research.</div>
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Average Cost of Lithium-ion Battery Cell Likely to Plummet to $100/kWh in 2023: Report

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