BriefCASE: Where are EV battery prices headed in 2025 and beyond?

By Srikant Jayanthan, Senior Research Analyst, Supply Chain and Technology, S&P Global Mobility

Lithium-ion (Li-ion) EV battery prices have decreased dramatically over the past few years, mainly due to the fall in prices of critical battery metals: Lithium, cobalt and nickel. For example, the price of cobalt has fallen from roughly $70,000 per metric ton in 2022 to about $30,000 in 2024.

Similarly, the price for lithium carbonate has fallen from a high of approximately $70,000 per metric ton to well below $15,000 in 2024. This article focuses primarily on two of the most sought-after Li-ion battery cathode chemistries in the automotive industry today — NCM811 and lithium iron phosphate (LFP) batteries.

Nickel cobalt manganese cells

The per kWh price of NCM811 cell is currently the lowest in Greater China due to the low cost of battery materials, thanks to high localization, and the price difference in the manufacturing cost of these cells compared to Europe and North America.

However, S&P Global Mobility forecasts a more than 7% drop in NCM811 cell prices in Europe between 2024 and 2030, falling at a higher rate than Greater China. Nevertheless, the global average price of NCM811 cell is expected to be marginally higher in the second half of the decade compared with 2024.

"An upward adjustment in prices is anticipated in the coming years, as some suppliers are currently selling their batteries with minimal to no profit margin, which is financially unsustainable. Additionally, another factor that could drive prices higher in the medium term is the insufficient upstream battery supply chain needed to support the growing regional industries," said Hugo Cruz, senior analyst, Battery Research at S&P Global Mobility.

Lithium iron phosphate cells

The price of LFP cells is over 20% lower than nickel cobalt manganese (NCM) cells. The average price of an LFP cell was just under $60/kWh in 2024.

Currently, Greater China has a near monopoly in LFP cell manufacturing, considering the negligible LFP production capacity in Europe and North America. However, LFP production capacity is poised to expand, especially in Europe, through this decade.

For example, last month, CATL announced an agreement with Stellantis to invest up to €4.1 billion to form a joint venture that will build a large-scale LFP battery plant in Zaragoza, Spain. The plant is targeted to start production by end of 2026. It has also been reported that LG Energy Solution is aiming to open an LFP plant in Europe.

The addition of LFP capacities outside of Greater China will raise the global average price of LFP cells in the midterm, but as the manufacturing cost is brought under control through process improvements, the global LFP average cell price will gradually fall below the current level. In fact, the difference of prices for LFP cells in Greater China versus Europe is expected to contract from 42% currently to roughly 29% in 2030.

EV battery prices at pack level

In terms of EV battery pack prices, the target to bring cost parity between EVs and internal combustion engine (ICE) vehicles was always thought to be $100/kWh. According to S&P Global Mobility's battery price model, the price of battery packs has already dropped below this mark in some cases.

For example, the price of LFP battery packs manufactured in Greater China is already considerably below this mark This has enabled several OEMs in mainland China to price their EVs in smaller segments on a par with ICE vehicles.

However, NCM811 prices in most regions are still north of $100/kWh mark, despite the fall in cell prices in the last two years. Even in Greater China, the cost of an NCM811 battery pack is about $103/kWh.

EV battery industry trends

The price of battery metals will likely increase in the longer term; however, due to economy of scale and efficiency gains, the cost of manufacturing will be lowered. These two effects will result in a flat price trend, which is in stark contrast with the exponential price reduction in the past decade.

We also expect a faster move toward cell-to-pack (CTP) and cell-to-body (CTB) configurations for batteries as automakers look to reduce weight and cost of manufacturing. In CTP, cells are directly mounted onto the pack housing, with no modules in between, reducing the number of components and assembly steps. Mainland Chinese cell makers such as BYD, with its Blade batteries and CATL, with its Shenxing and Qilin batteries, have been focusing heavily on CTP LFP batteries. Some European and American automakers are also looking at adopting CTP so we may see a few EV models with this tech in the next few years.

This article is part of a weekly newsletter series titled BriefCASE, produced by our AutoTechInsight service and featuring industry developments and technology trends in the automotive supply chain. The CASE automotive acronym stands for connected, autonomous, sharing, and electric.

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This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.