Lithium battery prices decline in 2024

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

According to the research, LIB prices in 2024 have experienced their biggest annual drop since 2017, with LIB pack prices dropping 20 percent from 2023 to a record low of $115 per kilowatt-hour (kWh) in December.

The trend is unlikely to be welcomed by companies that have invested to recover black mass, precursor cathode active materials (pCAM) and the lithium, cobalt, manganese or other metals found in end-of-life LIBs 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, “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 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 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.

“Currently, overcapacity is rife," BNEF says.

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

Longer term, BNEF’s analysts predict 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.