Lithium battery prices decline in 2024

Buyers of lithium-ion batteries are paying some 20 percent less for such batteries compared with their costs two years ago, according to an early December analysis by BloombergNEF (BNEF).

According to the research-focused business unit, lithium-ion battery prices in 2024 have experienced their biggest annual drop since 2017. “Lithium-ion battery pack prices dropped 20 percent from 2023 to a record low of $115 per kilowatt-hour (kWh)” this month, according to BNEF.

The trend is unlikely to be welcomed by companies that this decade have invested to recover black mass, precursor cathode active materials (pCAM) and the recycled-content lithium, cobalt, manganese or other metals found in end-of-life lithium-ion batteries in electric vehicles (EVs).

BNEF says factors driving the decline include cell manufacturing overcapacity, economies of scale, low metal and component prices, adoption of lower-cost lithium-iron-phosphate (LFP) batteries and a slowdown in EV sales growth in several nations.

At the Electrics/Electronics/EV Batteries Committee meeting at the Bureau of International Recycling (BIR) convention in Singapore in late October, Lee Allen of United Kingdom-based business information firm Fastmarkets said prices of EV battery metal powders and oxides have been down steadily (and in some cases dramatically) since January 2023.

In a late November post to the Fastmarkets website, Allen writes in part, “Fastmarkets’ daily price assessment for lithium carbonate 99.5 percent, battery grade, spot prices CIF [cost, insurance and freight] China, Japan and Korea averaged $10.56 to $11.33 per kilogram (kg) in the month of November 2024 to date, down sharply from $19.91 to $21.32 per kg one year before.”

On the new EV battery front, BNEF says that during the past two years, battery manufacturers have “aggressively expanded production capacity in anticipation of surging demand for batteries in the EV and stationary storage sectors,” adding that, “Currently, overcapacity is rife.”

BNEF says it expects battery pack prices to decrease by another $3 per kWh in 2025.

Longer term, BNEF’s analysts predict that several trends will “further reduce prices over the next decade,” adding that “next-generation technologies, such as silicon and lithium metal anodes, solid-state electrolytes, new cathode material, and new cell-manufacturing processes will play an important role in enabling further price reductions in the coming decade.”