Battery prices saw their biggest annual drop since 2017, with lithium-ion battery pack prices down by 20% from 2023 to a record low of $115/kWh, according to analysis by BloombergNEF (BNEF).

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 electric vehicle sales growth.

Currently, overcapacity is rife, with 3.1 TWh of fully commissioned battery-cell manufacturing capacity globally. That is more than 2.5 times annual demand for lithium-ion batteries in 2024, according to BNEF.

“The price drop for battery cells this year was greater compared with that seen in battery metal prices, indicating that margins for battery manufacturers are being squeezed. Smaller manufacturers face particular pressure to lower cell prices to fight for market share,” said Evelina Stoikou, the head of BNEF’s battery technology team and lead author of the report.

（Picture: Veer）