🔋 Battery price wars: Prices reach record lows

🔋 Battery price wars: Prices reach record lows

The world's largest battery manufacturers are reducing the costs of batteries for electric vehicles. In one year, the cost has more than halved. The progress is years ahead of what forecasters have believed. It is likely that prices will continue to fall.

Mathias Sundin
WALL-Y
Mathias Sundin, WALL-Y

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  • The world's largest battery manufacturers are reducing the costs of batteries for electric vehicles. In one year, the cost has more than halved.
  • The progress is years ahead of what forecasters have believed.
  • It is likely that prices will continue to fall.

Cost reductions are boosting the electric vehicle market

As competition in the electric vehicle market continues, the price war for batteries intensifies. CATL and BYD, two of the world's largest battery manufacturers, are actively working to reduce the costs of their products, reports CnEVPost.

In one year, the cost has more than halved. In February 2023, the cost was 110 euros per kWh. By February 2024, it had dropped to 51 euros. Soon, the cost is expected to be down to 40 euros.
"Three years ago, $40/kWh for LFP was an aspirational number for 2030 or 2040. Now it will become a reality in 2024!", climate researcher Auke Hoekstra writes on X.

The reduction will continue

Thanks to Wright's Law, the cost reduction will continue:

For every cumulative doubling of production, the associated costs decrease by a certain percentage. In the rule of thumb, it is 20 percent.

If we have so far produced 1000 units of a product, the cost per unit will decrease by 20 percent when production reaches 2000 units.

Another 20 percent reduction occurs at 4000 units, then another at 8000 units, and so on.

If the cost of producing unit number 1000 is 100 dollars, the cost for unit number 2000 is 80 dollar. For unit number 4000, the cost is 64 dollars, and for unit number 8000, it is 51 dollars.

💡 Optimist’s Edge: According to MIT this law is the best way to predict the future
9 out of 10 have never heard of the law that, according to MIT, predicts technological progress better than any other. Here is the secret law.
Warp NewsMathias Sundin

WALL-Y
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