5 ms·

EV battery prices to fall by nearly 50 pct and near ICE parity by 2026

38 points by doener 2y ago

kleiba 2y ago
The question remains whether this price drop - if it actually is going to occur at all - will be forwarded to the end-customer. Right now, the high prices of EV compared to ICE is one of the main roadblocks for broader adoption of electric cars.
- stavros 2y ago
  Why wouldn't it? Capitalism ensures that price drops reach the customer (unless there are cartels, of course, which are game-theoretically hard).
  - defrost 2y ago
    Right now the entities in the EV battery game want to build out, it's unlikely therefore they'd constrict and choke an ever increasing demand. That said, there absolutely is the potential for large key players to aquire more control and|or to maximise their profits rather than minimise and end price. Today’s battery and minerals supply chains revolve around China China produces three-quarters of all lithium-ion batteries and is home to 70% of production capacity for cathodes and 85% for anodes (both are key components of batteries). Over half of lithium, cobalt and graphite processing and refining capacity is located in China. Europe is responsible for over one-quarter of global EV assembly, but it is home to very little of the supply chain apart from cobalt processing at 20%. The United States has an even smaller role in the global EV battery supply chain, with only 10% of EV production and 7% of battery production capacity. Korea and Japan have considerable shares of the supply chain downstream of raw material processing, particularly in the highly technical production of cathode and anode material. Korea is responsible for 15% of global cathode material production capacity, while Japan accounts for 14% of cathode and 11% of anode material production. Korean and Japanese companies are also involved in the production of other battery components such as separators. Most key minerals are mined in resource-rich countries such as Australia, Chile and the Democratic Republic of Congo, and handled by a few major companies. https://www.iea.org/reports/global-supply-chains-of-ev-batteries https://www.iea.org/reports/global-supply-chains-of-ev-batte...
  - tdb7893 2y ago
    I would say competitive markets more than capitalism are responsible for that and we've seen many many cartels and monopolies (even with legislation against them) so it's weird to imply that they aren't fairly very common. It also doesn't need to be a full cartel, there is a lot of tacit collusion between companies or other mechanisms where they don't really compete.
  - BiteCode_dev 2y ago
    Continuous inflation without raised salaries means exactly the opposite of this. I ran a python script the other day using the French state data on pricing. Minimal wage was about 1000 euros after tax in 2003, and is 1300 in 2023. But 1000 in 2003 is about 2300 euros in 2023 according to the same official data. I don't know a single vital thing in my life that is not more expensive now than when I was a kid: food, water, energy, shelter, clothes, health... They are all more expensive. Now sure, internet access is less expensive and better, but you can't eat wifi.
    - stuaxo 2y ago
      Unchecked capitalism trys hard to turn into feudalism.
      - formerly_proven 2y ago
        France, a state with famously unchecked capitalism bordering on libertarian anarcho-capitalism.
    - lotsofpulp 2y ago
      Why would one expect those things to not be more expensive? Governments explicitly and intentionally manipulate currency so that prices (overall) are on an upward march. Also, comparing changes in income deciles over time would be more useful than minimum wage changes, as legislatures are not necessarily reacting in real time. > food, water, energy, shelter, clothes, health Many of these are things where technological advances resulting in greater and greater economies of scale plateaued, or where technological advances mean that your expectation of the quality of goods or service greatly increased. The former would be water/energy/shelter/food/clothes. The world has a lot more people competing for these resources, but there was no commensurate increase in supply. The latter would be health, where the healthcare from your childhood is a greatly different product (at the advanced levels, not necessarily the routine checkup or flu visit).
      - BiteCode_dev 2y ago
        Given that prices for health in the US are exorbitant because they are based on the free market and the prices in France much cheaper (even when you pay 100% of of pocket) because the market is state controled, I have a hard time to take your comment seriously. But I'm sure you will find a reason while health is an exception.
  - FooBarBizBazz 2y ago
    > Why wouldn't [the price drop]? For the same reason that Americans can't buy a BYD Seagull.
- HDThoreaun 2y ago
  The car market is incredibly competitive, especially in the budget range. There are too many automakers competing for any to just decide not to pass savings without having an uncompetitive product.
lupusreal 2y ago
I doubt the value proposition of buying used EVs will ever reach parity with ICE unless the government forces some new battery warranty/replacement scheme onto EV manufacturers. I was talking to my credit union about this while applying for an auto loan and they said I'd have to be out of my mind to even consider a used EV. A Japanese ICE with 100k miles on it has a high chance of giving the second owner another 100k miles with no major expenses besides oil changes. With used EVs that battery pack is a ticking time bomb waiting to blow a hole in your wallet.
- Lutger 2y ago
  That is surprising, I've always thought the value proposition of used EV would be miles ahead of ICE vehicles, at least the more modern ones. A quick google also confirms that the average life expectancy in mileage of EV is already ahead of ICE cars. Generally, EV have the reputation of requiring much less maintenance.
  - lordofgibbons 2y ago
    Ever have your phone or laptop not hold the charge it used to when you first bought it? The same thing happens to car batteries. This certainly doesn't help with people's range anxiety. I'm on the sideline waiting for the battery tech to improve a bit more before buying my next (electric) car. As an aside, I'm horrified by what new privacy invasive "features" these cars will include in all electric cars.
    - traceroute66 2y ago
      > I'm horrified by what new privacy invasive "features" these cars will include in all electric cars. My main horror with EVs, particularly Teslas is putting everything on a tablet display in the middle. Its like it was designed by some kid who's never driven a car. Its a safety issue, frankly. IMHO.
      - jcgrillo 2y ago
        In many U.S. states using a cell phone while driving is illegal under distracted driving rules. It should be the same for touch screens of all kinds.
ZeroGravitas 2y ago
This is up front price, not TCO where it's already parity. Also the 50% number is based on a bump in cathode material price in 2022 and 23 as can be clearly seen in the graph. It's now returned to a long term trend and up front purchase price parity has been predicted for mid 2020s for about a decade now. Here an article from 2017: https://about.bnef.com/blog/electric-cars-reach-price-parity-2025/ https://about.bnef.com/blog/electric-cars-reach-price-parity... Anyone working on longer timescales should have been planning for this. China was, the West wasn't and now the cheaper and better cars of the future are Chinese made.
- potato3732842 2y ago
  >not TCO where it's already parity. Sorry but this is just not true for any honest meaning of the word "true". Yes, you have TCO parity in some market segments for some use cases, particularly higher up the market (Tesla M3 vs BMW M3) and in the bottom of the market (subcompacts and compact crossovers) but there are giant gaping holes. There is no TCO parity (or even an offering) for intentionally built to a price utility vehicles, the little euro city vans and Ford Maverick type stuff. And this is before you start talking fullsize trucks and vans. The E-transit is a joke from a TCO perspective. It only makes sense if you're trying to run a fairly swanky low milage shuttle service and even then not really. I guess a few senior centers might like them. The electric half ton trucks are compelling for certain use cases and feature sets but the purchase prices are just so high to start with that the TCO on any useful timeline is way above that of white trucks with vinyl carpets and V6 engines. TCO parity really isn't there for anyone who gives a crap about TCO and buys accordingly because those people gravitate to the low TCO ICEs and purchase price is such a large contributor to TCO that a reduction in operating costs doesn't wash that out on a timeline that the overwhelming majority of new car buyers care about. Source: Purchases a new car last quarter. Wanted an EV, wound up with an ICE Honda. :(
  - thyristan 2y ago
    If you include capital cost in TCO as you should, a high price up front looks as bad as it should. And since lots of cars are leased or financed, this is also more realistic than the simple&stupid list-price+runningcost calculations.
hggigg 2y ago
Until it is in my hands and I've paid that for it at that price, I remain hesitant. I think every early pricing prediction I've seen was to drive investment or interest rather than push costs down.
saturn8601 2y ago
Kepp looking at the EV market and the cars are pretty lame. The experience of an EV is bar none the best but man the available models seem to suck. I'm just waiting for my favorite manufacturer(Mazda) to make an EV version of my car because I am tired of renting different EVs only to find that they miss some criteria that my current 18 year old rust bucket has.
xnx 2y ago
Source article: https://www.goldmansachs.com/insights/articles/electric-vehicle-battery-prices-are-expected-to-fall-almost-50-percent-by-2025 https://www.goldmansachs.com/insights/articles/electric-vehi...
NoGravitas 2y ago
Sure, now let me buy a BYD so I'm not paying for a lot of bling I don't want.

38 points by doener 2y ago

The question remains whether this price drop - if it actually is going to occur at all - will be forwarded to the end-customer. Right now, the high prices of EV compared to ICE is one of the main roadblocks for broader adoption of electric cars.

stavros 2y ago
Why wouldn't it? Capitalism ensures that price drops reach the customer (unless there are cartels, of course, which are game-theoretically hard).
- defrost 2y ago
  Right now the entities in the EV battery game want to build out, it's unlikely therefore they'd constrict and choke an ever increasing demand. That said, there absolutely is the potential for large key players to aquire more control and|or to maximise their profits rather than minimise and end price. Today’s battery and minerals supply chains revolve around China China produces three-quarters of all lithium-ion batteries and is home to 70% of production capacity for cathodes and 85% for anodes (both are key components of batteries). Over half of lithium, cobalt and graphite processing and refining capacity is located in China. Europe is responsible for over one-quarter of global EV assembly, but it is home to very little of the supply chain apart from cobalt processing at 20%. The United States has an even smaller role in the global EV battery supply chain, with only 10% of EV production and 7% of battery production capacity. Korea and Japan have considerable shares of the supply chain downstream of raw material processing, particularly in the highly technical production of cathode and anode material. Korea is responsible for 15% of global cathode material production capacity, while Japan accounts for 14% of cathode and 11% of anode material production. Korean and Japanese companies are also involved in the production of other battery components such as separators. Most key minerals are mined in resource-rich countries such as Australia, Chile and the Democratic Republic of Congo, and handled by a few major companies. https://www.iea.org/reports/global-supply-chains-of-ev-batteries https://www.iea.org/reports/global-supply-chains-of-ev-batte...
- tdb7893 2y ago
  I would say competitive markets more than capitalism are responsible for that and we've seen many many cartels and monopolies (even with legislation against them) so it's weird to imply that they aren't fairly very common. It also doesn't need to be a full cartel, there is a lot of tacit collusion between companies or other mechanisms where they don't really compete.
- BiteCode_dev 2y ago
  Continuous inflation without raised salaries means exactly the opposite of this. I ran a python script the other day using the French state data on pricing. Minimal wage was about 1000 euros after tax in 2003, and is 1300 in 2023. But 1000 in 2003 is about 2300 euros in 2023 according to the same official data. I don't know a single vital thing in my life that is not more expensive now than when I was a kid: food, water, energy, shelter, clothes, health... They are all more expensive. Now sure, internet access is less expensive and better, but you can't eat wifi.
  - stuaxo 2y ago
    Unchecked capitalism trys hard to turn into feudalism.
    - formerly_proven 2y ago
      France, a state with famously unchecked capitalism bordering on libertarian anarcho-capitalism.
  - lotsofpulp 2y ago
    Why would one expect those things to not be more expensive? Governments explicitly and intentionally manipulate currency so that prices (overall) are on an upward march. Also, comparing changes in income deciles over time would be more useful than minimum wage changes, as legislatures are not necessarily reacting in real time. > food, water, energy, shelter, clothes, health Many of these are things where technological advances resulting in greater and greater economies of scale plateaued, or where technological advances mean that your expectation of the quality of goods or service greatly increased. The former would be water/energy/shelter/food/clothes. The world has a lot more people competing for these resources, but there was no commensurate increase in supply. The latter would be health, where the healthcare from your childhood is a greatly different product (at the advanced levels, not necessarily the routine checkup or flu visit).
    - BiteCode_dev 2y ago
      Given that prices for health in the US are exorbitant because they are based on the free market and the prices in France much cheaper (even when you pay 100% of of pocket) because the market is state controled, I have a hard time to take your comment seriously. But I'm sure you will find a reason while health is an exception.
- FooBarBizBazz 2y ago
  > Why wouldn't [the price drop]? For the same reason that Americans can't buy a BYD Seagull.
HDThoreaun 2y ago
The car market is incredibly competitive, especially in the budget range. There are too many automakers competing for any to just decide not to pass savings without having an uncompetitive product.

lupusreal 2y ago

I doubt the value proposition of buying used EVs will ever reach parity with ICE unless the government forces some new battery warranty/replacement scheme onto EV manufacturers. I was talking to my credit union about this while applying for an auto loan and they said I'd have to be out of my mind to even consider a used EV. A Japanese ICE with 100k miles on it has a high chance of giving the second owner another 100k miles with no major expenses besides oil changes. With used EVs that battery pack is a ticking time bomb waiting to blow a hole in your wallet.

Lutger 2y ago
That is surprising, I've always thought the value proposition of used EV would be miles ahead of ICE vehicles, at least the more modern ones. A quick google also confirms that the average life expectancy in mileage of EV is already ahead of ICE cars. Generally, EV have the reputation of requiring much less maintenance.
- lordofgibbons 2y ago
  Ever have your phone or laptop not hold the charge it used to when you first bought it? The same thing happens to car batteries. This certainly doesn't help with people's range anxiety. I'm on the sideline waiting for the battery tech to improve a bit more before buying my next (electric) car. As an aside, I'm horrified by what new privacy invasive "features" these cars will include in all electric cars.
  - traceroute66 2y ago
    > I'm horrified by what new privacy invasive "features" these cars will include in all electric cars. My main horror with EVs, particularly Teslas is putting everything on a tablet display in the middle. Its like it was designed by some kid who's never driven a car. Its a safety issue, frankly. IMHO.
    - jcgrillo 2y ago
      In many U.S. states using a cell phone while driving is illegal under distracted driving rules. It should be the same for touch screens of all kinds.

ZeroGravitas 2y ago

This is up front price, not TCO where it's already parity. Also the 50% number is based on a bump in cathode material price in 2022 and 23 as can be clearly seen in the graph. It's now returned to a long term trend and up front purchase price parity has been predicted for mid 2020s for about a decade now. Here an article from 2017: https://about.bnef.com/blog/electric-cars-reach-price-parity-2025/ https://about.bnef.com/blog/electric-cars-reach-price-parity... Anyone working on longer timescales should have been planning for this. China was, the West wasn't and now the cheaper and better cars of the future are Chinese made.

potato3732842 2y ago
>not TCO where it's already parity. Sorry but this is just not true for any honest meaning of the word "true". Yes, you have TCO parity in some market segments for some use cases, particularly higher up the market (Tesla M3 vs BMW M3) and in the bottom of the market (subcompacts and compact crossovers) but there are giant gaping holes. There is no TCO parity (or even an offering) for intentionally built to a price utility vehicles, the little euro city vans and Ford Maverick type stuff. And this is before you start talking fullsize trucks and vans. The E-transit is a joke from a TCO perspective. It only makes sense if you're trying to run a fairly swanky low milage shuttle service and even then not really. I guess a few senior centers might like them. The electric half ton trucks are compelling for certain use cases and feature sets but the purchase prices are just so high to start with that the TCO on any useful timeline is way above that of white trucks with vinyl carpets and V6 engines. TCO parity really isn't there for anyone who gives a crap about TCO and buys accordingly because those people gravitate to the low TCO ICEs and purchase price is such a large contributor to TCO that a reduction in operating costs doesn't wash that out on a timeline that the overwhelming majority of new car buyers care about. Source: Purchases a new car last quarter. Wanted an EV, wound up with an ICE Honda. :(
- thyristan 2y ago
  If you include capital cost in TCO as you should, a high price up front looks as bad as it should. And since lots of cars are leased or financed, this is also more realistic than the simple&stupid list-price+runningcost calculations.

hggigg 2y ago

Until it is in my hands and I've paid that for it at that price, I remain hesitant. I think every early pricing prediction I've seen was to drive investment or interest rather than push costs down.

saturn8601 2y ago

Kepp looking at the EV market and the cars are pretty lame. The experience of an EV is bar none the best but man the available models seem to suck. I'm just waiting for my favorite manufacturer(Mazda) to make an EV version of my car because I am tired of renting different EVs only to find that they miss some criteria that my current 18 year old rust bucket has.

xnx 2y ago

Source article: https://www.goldmansachs.com/insights/articles/electric-vehicle-battery-prices-are-expected-to-fall-almost-50-percent-by-2025 https://www.goldmansachs.com/insights/articles/electric-vehi...

NoGravitas 2y ago

Sure, now let me buy a BYD so I'm not paying for a lot of bling I don't want.