EV Battery Prices Expected To Fall Almost 50% By 2026

Goldman Sachs Research predicts that EV battery prices will drop more quickly than anticipated, bringing EVs closer to price parity with internal combustion engine vehicles.

The average price of batteries decreased globally from $153 per kilowatt-hour in 2022 to $149 last year. According to researchers, by the end of 2024, prices should reach $111 on a global scale.

Photo: Goldman Sachs.
By 2026, they might almost halve from 2023 levels, to as low as $80/kWh. By this time, battery electric vehicles (BEVs) in the US would become as cheap as gas-powered vehicles, negating the need for government subsidies.
“Admittedly, that leaves near-term EV battery demand more dependent on regulations, especially next year,” says Nikhil Bhandari, co-head of Goldman Sachs Research’s Asia-Pacific natural resources and clean energy research. “But we think we’re going to see a strong comeback in demand in 2026 purely from an economics perspective. We believe 2026 is when a consumer-led adoption phase will largely begin.”
Technological innovation is a major factor driving this trend, as new battery products can have 30% more energy density than their predecessors at a lower cost. This is accomplished by removing cell-containing modules and switching to the space-saving cell-to-pack technology.

The ongoing decline in the cost of battery metals, which make up 60% of the total product cost, is another significant facilitator.

Bhandari claims that reduced commodity costs account for more than 40% of the anticipated drop in battery prices, reversing the so-called "green inflation" that drove up the price of some battery metals between 2020 and 2023.