9 ms·

Electric car battery prices are going back down faster than expected (2023)

33 points by hotdailys 3y ago

Jensson 3y ago
This is mostly talking about estimates, most of that drop hasn't happened yet.
- bryanlarsen 3y ago
  But most of the drop is in 2024, so is fairly firm.
xyst 3y ago
What’s never explained here is the why. Is the market for the raw materials cheaper because there is a decrease in demand or an increase in supply of raw materials in the market? Articles that hand wave it as “due to inflation” are a bit frustrating.
- rsynnott 3y ago
  I mean, there clearly isn’t a decrease in demand; electric car sales globally continue to increase. LFP batteries getting more common might be one factor; they have lower materials cost than conventional lithium ion batteries.
- ianai 3y ago
  Because that question is more of an economics research paper or policy brief than a mass media article. And in that arena data are currency, ie largely not public. Generally, there’s a lot of economics principles at play. Economies of scale mean as more is produced, often, still further increases in production are possible more cheaply than previously obtained. First semi chip produced might cost billions. The billionth chip might be pennies. There’s also a concept in the environmental economics that pulling finite resources out of the ground responds to increasing demand similar to pulling more money out of a bank via loans. Ie the most easy to obtain resources are mined first and the cost increases from there. In practice, too, producer relationships matter. A company buying batteries for EVs (ie at that scale) for their 5th year in a row is going to have demonstrated to their suppliers that, indeed, they can write a check for all the materials they’ve ordered much more than in year 0. So their suppliers have better information about how reliable their needs are, and so on. Lots of complicated things not generally in the public knowledge nor easy to explain quick enough to not get scooped by another organization.
- jordanb 3y ago
  I think there's been a big scaleup of capacity that's coming on-line exactly as BEVs are declining in popularity.
  - frogblast 3y ago
    Correction: There is a big scaleup of capacity that's coming online exactly as BEVs are growing in popularity slower than many previous forecasts (hence lots of press about some carmakers having to scale back BEV production, while still moving more BEVs than last year). That is a US-centric statement. BEV demand is still quite explosive in China and Europe. https://www.energy.gov/eere/vehicles/articles/fotw-1329-february-12-2024-monthly-sales-new-light-duty-evs-united-states https://www.energy.gov/eere/vehicles/articles/fotw-1329-febr...
    - epistasis 3y ago
      > BEVs are growing in popularity slower than many previous forecasts I've spent a fair amount of time looking for such a forecast that was actually more aggressive than the real popularity. Your own link only shows a rather big increase in EV sales in the US, not a decrease, and it doesn't show any missed forecasts. There was definitely a flurry of bad mass media articles about how the traditional car makers were scaling back their plans. But the facts in these articles were either extremely stilted and biased, or the facts in the articles directly contradicted the headlines. For whatever reason, the car majors decided they wanted to tamp down on EVs in the media, and editors came through in spades with deceptive articles.
- defrost 3y ago
  Initially raw materials were anticipated to be hard to come by, competive forward contracts put up prices as "shortages were forecast" and mining companies went hell for leather to open new lithium (and other elements required) prospects ... Recently (last six months) it has become clear that more raw prospects were opened than actual demand existed for (glut of future supply), as a result a number of 'fresh' lithium mines have been recently shuttered. In the post mining concentrate processing game ground has been broken on several processing plants that take mined concentrates and produce usuable raw minerals - Tesla in Texas, for example, now has a pipelined spodumene processing plant and adjoining battery manufacturing facility that will soon be completed. Much of this flux from expensive to cheaper comes about from the interplay of forward contracts - it takes 18 months and more to bring new mines to production, to bring processing plants to completion, etc. What's behind the drastic downturn in nickel and lithium prices, and what does it mean? https://www.abc.net.au/news/2024-01-26/examining-the-drastic-downturn-in-nickel-and-lithium-prices/103388902 https://www.abc.net.au/news/2024-01-26/examining-the-drastic...
- deleted 3y ago
  [deleted]
izzydata 3y ago
So will car manufacturers lower the price of electric cars or will they just pocket the difference?
- hotdailys 3y ago
  Fingers crossed, we might just see more affordable EVs hitting the streets soon!
- pascalxus 3y ago
  there's enough competition in the EV sector for margins to remain fairly low. o saw a chart once. Tesla is the only one with big margins, i remember.
  - reducesuffering 3y ago
    Margins aren't just low, many times they're negative! Rivian is losing something like 30% of the sales price each car. Tesla's margins used to be some of the best in the entire auto industry at like 25%, but are slimming down to 17% now.
- bryanlarsen 3y ago
  Markets open to competition from BYD will see massive price drops.
  - bzzzt 3y ago
    Or governments will impose more import taxes to counter Chinese government sponsored price dumping.
- stubish 3y ago
  Someone will grab the low end, currently served by cheap ICE cars and the second hand market. Premium and prestige brands will of course continue to charge premium and prestige prices, because that is their market.
xnx 3y ago
Goldman Sachs report from November 1, 2023 that this is based off of: https://www.goldmansachs.com/intelligence/pages/electric-vehicle-battery-prices-falling.html https://www.goldmansachs.com/intelligence/pages/electric-veh... Here's a February 29, 2024 article from Goldman Sachs on the same topic: https://www.goldmansachs.com/intelligence/pages/even-as-ev-sales-slow-lower-battery-prices-expect.html https://www.goldmansachs.com/intelligence/pages/even-as-ev-s...
GaggiX 3y ago
I mean, I would also love to see a server rack battery at $99 per kwh, but of a different chemistry, LiFePO4, I wouldn't trust having any other type of lithium battery at home.
hefferbub 3y ago
I know most people don’t believe this, but it is likely that electric cars have a good chance of becoming far cheaper than ICE cars over the coming 5-10 years. EVs are complex, but in ways that are much more subject to economies of scale. For example, much of their value is in the software, which replicates for nearly zero marginal cost. Electric motor assembly is highly automatable and a fraction of the cost of assembling engines. There are no emission control systems, fuel systems, exhaust systems. That leaves battery materials and construction, and these are dropping fast. Goldman Sachs just predicted pack-level prices will be below $100 KWh by 2025 and continue dropping by 11% per year throughout the decade. In fact, BYD already sells a perfectly-reasonable EV in China for around $11,000 US equivalent. There will, of course, always be premium priced EVs in the market, but I believe the lower bound of the market will be much lower than the Corollas, Tercels and Honda Fits of today.
- m463 3y ago
  I'm a little afraid "economies of scale" will turn into a steering wheel one or two pedals and an ipad, no other controls.
  - yaomtc 3y ago
    I really hope automakers don't start embracing touchscreens even more. Tactile feedback / muscle memory is important for safer operation. At least Mazda seems to get that[1], if only others would get over their minimalism obsession. Would embrace regulations requiring physical controls for most common tasks. [1]: https://www.motorauthority.com/news/1121372_why-mazda-is-purging-touchscreens-from-its-vehicles https://www.motorauthority.com/news/1121372_why-mazda-is-pur...
    - beached_whale 3y ago
      I want the year 2010 car experience with some of the EV benefits. So electric motor/battery/charging/steer and break by wire/classic dials for speed/classic climate control controls/classic signalling and lighting controls/... Maybe Carplay/Android Auto, but no tracking or operating controls that are touch screens. Also, a way to disable the display with a button.
PaulKeeble 3y ago
This year is looking pretty interesting for batteries. We have the Li-on potentially dropping to $100 a KWH, that will probably also mean LifePO4 will probably come down to below $100, maybe $80 and then the introduction of Sodium Ion this year which is meant to get down to $40 a KWH. So far Sodium Ion isn't delivering on that price drop, while the cars are all cheap but not yet really available the actual cells for sale on aliexpress and alibaba are all a lot more expensive than LifePO4 at the moment. The 13450 cells at 10Ah instead of the 15Ah for LifePO4 and at the moment are also 5x the price. Its just gouged early pricing currently but it should bring the price of home storage and car batteries down less than half of Li-on and LifePO4 but with a lower density. Interesting year for batteries and EVs, lots of EVs cheaper than ICE vehicles coming out this year as a result.
- hackerlight 3y ago
  Has anyone projected levelized cost of energy (renewables & storage) with these assumptions around storage costs plugged in?
  - refulgentis 3y ago
    I'm sure _someone_ has, there's a lot of people and spreadsheets out there. :)
ranger_danger 3y ago
Don't worry, prices will be back up soon enough: https://news.ycombinator.com/item?id=39705926 https://news.ycombinator.com/item?id=39705926
- stubish 3y ago
  Manufacturers continuing to use low cost imported parts instead of high cost US manufactured parts will cause prices to increase?
deleted 3y ago
[deleted]
ChrisArchitect 3y ago
(2023)
14 3y ago
As soon as that happens we will start to see the road tax somehow added on to our daily driving cost and the savings made by using electricity will be greatly reduced due to this tax making EV's just marginally better for cost. But we need to pave the roads somehow so I do expect this to happen and am okay with it.
- SnorkelTan 3y ago
  I tried pointing this out in an ev thread and got downvoted. The expense of driving is really maintaining the roads. Sounds like you’ve actually looked at the price components of gas and understand why they’re so outrageous. My personal prediction is all those carbon taxes on gas transfer over to evs and get renamed to something else.
  - bryanlarsen 3y ago
    Electric cars already pay more in taxes and fees in 36 states than gasoline cars do. https://www.atlasevhub.com/data_story/ev-drivers-in-36-states-pay-a-surplus-of-fees-each-year/ https://www.atlasevhub.com/data_story/ev-drivers-in-36-state...
- plantwallshoe 3y ago
  Marginal improvement? The gas tax is my state is relatively high at $.50/gal. If I have to pay that back directly to the state we’re still looking at like $12 vs $70 to charge a battery vs fill a gas tank. On top of that take away most of the engine maintenance costs and you’re coming out way ahead.
thelastgallon 3y ago
https://thedriven.io/2024/01/25/worlds-largest-ev-battery-maker-set-to-cut-costs-in-half-by-mid-2024/ https://thedriven.io/2024/01/25/worlds-largest-ev-battery-ma... "The CnEVPost article says the average price of square LFP battery cells in mid 2023 was around RMB 800 to RMB 900 per kWh. This means the price of an average 60 kWh battery pack will have dropped from $US6,776.00 to just $3,388.00 in just 12 months, saving EV manufacturers over $3,000 per vehicle."

33 points by hotdailys 3y ago

Jensson 3y ago

This is mostly talking about estimates, most of that drop hasn't happened yet.

bryanlarsen 3y ago
But most of the drop is in 2024, so is fairly firm.

xyst 3y ago

What’s never explained here is the why. Is the market for the raw materials cheaper because there is a decrease in demand or an increase in supply of raw materials in the market? Articles that hand wave it as “due to inflation” are a bit frustrating.

rsynnott 3y ago
I mean, there clearly isn’t a decrease in demand; electric car sales globally continue to increase. LFP batteries getting more common might be one factor; they have lower materials cost than conventional lithium ion batteries.
ianai 3y ago
Because that question is more of an economics research paper or policy brief than a mass media article. And in that arena data are currency, ie largely not public. Generally, there’s a lot of economics principles at play. Economies of scale mean as more is produced, often, still further increases in production are possible more cheaply than previously obtained. First semi chip produced might cost billions. The billionth chip might be pennies. There’s also a concept in the environmental economics that pulling finite resources out of the ground responds to increasing demand similar to pulling more money out of a bank via loans. Ie the most easy to obtain resources are mined first and the cost increases from there. In practice, too, producer relationships matter. A company buying batteries for EVs (ie at that scale) for their 5th year in a row is going to have demonstrated to their suppliers that, indeed, they can write a check for all the materials they’ve ordered much more than in year 0. So their suppliers have better information about how reliable their needs are, and so on. Lots of complicated things not generally in the public knowledge nor easy to explain quick enough to not get scooped by another organization.
jordanb 3y ago
I think there's been a big scaleup of capacity that's coming on-line exactly as BEVs are declining in popularity.
- frogblast 3y ago
  Correction: There is a big scaleup of capacity that's coming online exactly as BEVs are growing in popularity slower than many previous forecasts (hence lots of press about some carmakers having to scale back BEV production, while still moving more BEVs than last year). That is a US-centric statement. BEV demand is still quite explosive in China and Europe. https://www.energy.gov/eere/vehicles/articles/fotw-1329-february-12-2024-monthly-sales-new-light-duty-evs-united-states https://www.energy.gov/eere/vehicles/articles/fotw-1329-febr...
  - epistasis 3y ago
    > BEVs are growing in popularity slower than many previous forecasts I've spent a fair amount of time looking for such a forecast that was actually more aggressive than the real popularity. Your own link only shows a rather big increase in EV sales in the US, not a decrease, and it doesn't show any missed forecasts. There was definitely a flurry of bad mass media articles about how the traditional car makers were scaling back their plans. But the facts in these articles were either extremely stilted and biased, or the facts in the articles directly contradicted the headlines. For whatever reason, the car majors decided they wanted to tamp down on EVs in the media, and editors came through in spades with deceptive articles.
defrost 3y ago
Initially raw materials were anticipated to be hard to come by, competive forward contracts put up prices as "shortages were forecast" and mining companies went hell for leather to open new lithium (and other elements required) prospects ... Recently (last six months) it has become clear that more raw prospects were opened than actual demand existed for (glut of future supply), as a result a number of 'fresh' lithium mines have been recently shuttered. In the post mining concentrate processing game ground has been broken on several processing plants that take mined concentrates and produce usuable raw minerals - Tesla in Texas, for example, now has a pipelined spodumene processing plant and adjoining battery manufacturing facility that will soon be completed. Much of this flux from expensive to cheaper comes about from the interplay of forward contracts - it takes 18 months and more to bring new mines to production, to bring processing plants to completion, etc. What's behind the drastic downturn in nickel and lithium prices, and what does it mean? https://www.abc.net.au/news/2024-01-26/examining-the-drastic-downturn-in-nickel-and-lithium-prices/103388902 https://www.abc.net.au/news/2024-01-26/examining-the-drastic...
deleted 3y ago
[deleted]

izzydata 3y ago

So will car manufacturers lower the price of electric cars or will they just pocket the difference?

hotdailys 3y ago
Fingers crossed, we might just see more affordable EVs hitting the streets soon!
pascalxus 3y ago
there's enough competition in the EV sector for margins to remain fairly low. o saw a chart once. Tesla is the only one with big margins, i remember.
- reducesuffering 3y ago
  Margins aren't just low, many times they're negative! Rivian is losing something like 30% of the sales price each car. Tesla's margins used to be some of the best in the entire auto industry at like 25%, but are slimming down to 17% now.
bryanlarsen 3y ago
Markets open to competition from BYD will see massive price drops.
- bzzzt 3y ago
  Or governments will impose more import taxes to counter Chinese government sponsored price dumping.
stubish 3y ago
Someone will grab the low end, currently served by cheap ICE cars and the second hand market. Premium and prestige brands will of course continue to charge premium and prestige prices, because that is their market.

xnx 3y ago

Goldman Sachs report from November 1, 2023 that this is based off of: https://www.goldmansachs.com/intelligence/pages/electric-vehicle-battery-prices-falling.html https://www.goldmansachs.com/intelligence/pages/electric-veh... Here's a February 29, 2024 article from Goldman Sachs on the same topic: https://www.goldmansachs.com/intelligence/pages/even-as-ev-sales-slow-lower-battery-prices-expect.html https://www.goldmansachs.com/intelligence/pages/even-as-ev-s...

GaggiX 3y ago

I mean, I would also love to see a server rack battery at $99 per kwh, but of a different chemistry, LiFePO4, I wouldn't trust having any other type of lithium battery at home.

hefferbub 3y ago

I know most people don’t believe this, but it is likely that electric cars have a good chance of becoming far cheaper than ICE cars over the coming 5-10 years. EVs are complex, but in ways that are much more subject to economies of scale. For example, much of their value is in the software, which replicates for nearly zero marginal cost. Electric motor assembly is highly automatable and a fraction of the cost of assembling engines. There are no emission control systems, fuel systems, exhaust systems. That leaves battery materials and construction, and these are dropping fast. Goldman Sachs just predicted pack-level prices will be below $100 KWh by 2025 and continue dropping by 11% per year throughout the decade. In fact, BYD already sells a perfectly-reasonable EV in China for around $11,000 US equivalent. There will, of course, always be premium priced EVs in the market, but I believe the lower bound of the market will be much lower than the Corollas, Tercels and Honda Fits of today.

m463 3y ago
I'm a little afraid "economies of scale" will turn into a steering wheel one or two pedals and an ipad, no other controls.
- yaomtc 3y ago
  I really hope automakers don't start embracing touchscreens even more. Tactile feedback / muscle memory is important for safer operation. At least Mazda seems to get that[1], if only others would get over their minimalism obsession. Would embrace regulations requiring physical controls for most common tasks. [1]: https://www.motorauthority.com/news/1121372_why-mazda-is-purging-touchscreens-from-its-vehicles https://www.motorauthority.com/news/1121372_why-mazda-is-pur...
  - beached_whale 3y ago
    I want the year 2010 car experience with some of the EV benefits. So electric motor/battery/charging/steer and break by wire/classic dials for speed/classic climate control controls/classic signalling and lighting controls/... Maybe Carplay/Android Auto, but no tracking or operating controls that are touch screens. Also, a way to disable the display with a button.

PaulKeeble 3y ago

This year is looking pretty interesting for batteries. We have the Li-on potentially dropping to $100 a KWH, that will probably also mean LifePO4 will probably come down to below $100, maybe $80 and then the introduction of Sodium Ion this year which is meant to get down to $40 a KWH. So far Sodium Ion isn't delivering on that price drop, while the cars are all cheap but not yet really available the actual cells for sale on aliexpress and alibaba are all a lot more expensive than LifePO4 at the moment. The 13450 cells at 10Ah instead of the 15Ah for LifePO4 and at the moment are also 5x the price. Its just gouged early pricing currently but it should bring the price of home storage and car batteries down less than half of Li-on and LifePO4 but with a lower density. Interesting year for batteries and EVs, lots of EVs cheaper than ICE vehicles coming out this year as a result.

hackerlight 3y ago
Has anyone projected levelized cost of energy (renewables & storage) with these assumptions around storage costs plugged in?
- refulgentis 3y ago
  I'm sure _someone_ has, there's a lot of people and spreadsheets out there. :)

ranger_danger 3y ago

Don't worry, prices will be back up soon enough: https://news.ycombinator.com/item?id=39705926 https://news.ycombinator.com/item?id=39705926

stubish 3y ago
Manufacturers continuing to use low cost imported parts instead of high cost US manufactured parts will cause prices to increase?

deleted 3y ago

[deleted]

ChrisArchitect 3y ago

(2023)

14 3y ago

As soon as that happens we will start to see the road tax somehow added on to our daily driving cost and the savings made by using electricity will be greatly reduced due to this tax making EV's just marginally better for cost. But we need to pave the roads somehow so I do expect this to happen and am okay with it.

SnorkelTan 3y ago
I tried pointing this out in an ev thread and got downvoted. The expense of driving is really maintaining the roads. Sounds like you’ve actually looked at the price components of gas and understand why they’re so outrageous. My personal prediction is all those carbon taxes on gas transfer over to evs and get renamed to something else.
- bryanlarsen 3y ago
  Electric cars already pay more in taxes and fees in 36 states than gasoline cars do. https://www.atlasevhub.com/data_story/ev-drivers-in-36-states-pay-a-surplus-of-fees-each-year/ https://www.atlasevhub.com/data_story/ev-drivers-in-36-state...
plantwallshoe 3y ago
Marginal improvement? The gas tax is my state is relatively high at $.50/gal. If I have to pay that back directly to the state we’re still looking at like $12 vs $70 to charge a battery vs fill a gas tank. On top of that take away most of the engine maintenance costs and you’re coming out way ahead.

thelastgallon 3y ago

https://thedriven.io/2024/01/25/worlds-largest-ev-battery-maker-set-to-cut-costs-in-half-by-mid-2024/ https://thedriven.io/2024/01/25/worlds-largest-ev-battery-ma... "The CnEVPost article says the average price of square LFP battery cells in mid 2023 was around RMB 800 to RMB 900 per kWh. This means the price of an average 60 kWh battery pack will have dropped from $US6,776.00 to just $3,388.00 in just 12 months, saving EV manufacturers over $3,000 per vehicle."