According to new analysis from Goldman Sachs, several factors could converge to reduce electric vehicle battery prices, which in turn could boost electric vehicle demand.
Analysts expect electric vehicle battery prices to fall nearly 40% between 2023 and 2025 and that electric vehicles will “reach a breakthrough in cost parity” with internal combustion vehicles at some point. market numbers early next year without subsidies. According to the analysis, that is due to lower raw material costs and the impact of the current stagnation in electric vehicle sales, causing supply to catch up with demand.
Rivian battery stack
Goldman lowered its forecast for global battery demand growth in 2024 to 29% year-on-year from a previous forecast of 35%. The company estimates battery demand to increase 31% by 2023.
This is putting less pressure on the battery materials market, reducing demand for metals like nickel and lithium (something Other analyzes have shown) and help reduce battery prices, which Goldman points out can account for a third of the cost of an electric vehicle. Battery innovation, whether it’s new solid-state chemistries or better manufacturing processes, could also help reduce costs, according to the analysis.
tram Battery prices skyrocket in 2022Later started to decrease again last year, as raw material costs increased and decreased. But The Department of Energy has taken note that even if battery costs increase in 2022, adjusted for inflation, they are still part of a prolonged downward trend.
Goldman Sachs electric vehicle battery price forecast March 2024
Analysts predict battery prices will continue to decline significantly through 2025 and more or less level off after that. And that could allow electric vehicles to quickly gain a larger market share. Goldman analysts now predict that electric vehicles could reach 50% market share in the US by 2030 and 68% in the European Union by that year.
This is mostly in line with recent predictions from the International Council on Clean Transportation (ICCT). In analysis published last month, ICCT argued that increasing lithium supply could make electric vehicles cheaper than gasoline vehicles. in a couple of years. But Super sized battery in large trucks and SUVs is one of the few factors that can create braking bias.
