TEHRAN, July 13 — The cost of lithium-ion battery packs has fallen by 87 percent since 2010, according to BloombergNEF’s annual battery price survey. That decline — from $1,100 per kilowatt-hour in 2010 to $139 per kWh in 2023 — has been the single biggest factor making electric vehicles price-competitive with internal combustion engine cars, the data show. Economies of scale have played a central role.
Global battery production capacity reached 1,500 gigawatt-hours in 2023, according to industry reports. Improvements in energy density — from roughly 200 watt-hours per kilogram in 2010 to about 300 Wh/kg in 2023 — have also cut costs.
Manufacturing innovations from companies such as CATL, or Contemporary Amperex Technology Co., Limited, have further driven prices down. SNE Research data indicate that CATL produced 37 percent of the world’s EV batteries in 2023.
Major players and market structure
CATL, founded in 2011 in Ningde, China, became the world’s largest battery manufacturer by 2017. Other major players include BYD of China, with a 16 percent market share; LG Energy Solution of South Korea, with 14 percent; and Panasonic of Japan, with 8 percent, according to SNE Research. The U.S. Department of Energy’s Battery500 Consortium has set a target of achieving 500 Wh/kg by 2025.
Raw material prices remain volatile. Lithium carbonate prices surged from $6,000 per metric ton in 2020 to $80,000 in late 2022, then fell to $20,000 in early 2024, according to market reports.
Cobalt, a key cathode material, saw prices peak at $82,000 per metric ton in 2022 before declining. These fluctuations continue to impact battery costs and EV prices, industry analysts say.
Regional context and what to watch
For observers in the Middle East and across the developing world, the battery price story carries particular weight. Many countries in this region are heavily reliant on oil revenues and have been slow to embrace electric mobility. The sustained drop in battery costs, however, is reshaping the global energy landscape in ways that could affect long-term demand for petroleum.
State and international reports have noted that several Gulf states are now investing in battery manufacturing and EV infrastructure, though the scale remains modest compared to Chinese and South Korean output. What to watch next: whether raw material prices stabilise or continue their sharp swings, and whether the Battery500 Consortium — or other research efforts — can push energy density past the 500 Wh/kg threshold.
If those advances materialise, the cost per kWh could fall further, potentially accelerating EV adoption in markets that have so far been priced out.
