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Are Lithium-ion Batteries Getting More Expensive?

Prices are rising, everywhere we look. When you buy something now, if you bought it over a month ago for food or perhaps a year ago for other things, you expect an increase. Are lithium-ion batteries getting more expensive is a question you might therefore ask. It is under monitor by BloombergNEF who track the price annually since 2010. And so, we know that the lithium-ion battery price has been pretty stable up to 2020. Yet just like everything else, more recently there has been an increase in the price. Here are a few things we have noted:

The Long View

There are plenty of companies making lithium-ion batteries doing their research and development. R&D is vital in companies to make constant refinements and improvements to their products and technology. This is what ensures things can be made better. It might be quicker, cheaper, more environmentally friendly, or made with different resources. This is essential to bring down the cost of lithium-ion batteries and similar technologies we might use in this way. Sometimes you need to take the long view. Yes, this will not benefit you today, but a big organisation can afford to think to the future. A year, 5, 10; it all depends on the specific company and their future goals. But R&D is the way developments happen.

Reducing Costs at Manufacturing

Despite the lithium-ion battery price rising lately, it could have gone even further. For example, recently, the formulation has been changing to reduce the amount of cobalt. This is a relatively expensive element, pushing up the price of the batteries. Additionally, manufacturers have been using a low-cost kind of cathode chemistry which has led to a cost reduction of around 20%. So, with these raw materials reducing, there has been a less sharp increase in cost. However, overall raw materials and manufacturing costs are rising so when asking are lithium-ion batteries getting more expensive, the answer is essentially yes. Yet at least some of the cost increase has been mitigated by new processes.

The Price We See Today

The price we see for lithium-ion batteries today is more than it was 5 years ago, but is that a surprise? Yes, technologies do come down in price sometimes over time – take any large household appliance. When they first appear they are very expensive, but as they become more mainstream, they reduce. This might have been the case with lithium-ion batteries too, but with everything rising in price, it was not possible. It simply mirrors what we see in the rest of our country and across the world too. Just about everything is increasing in price and lithium-ion batteries are not able to avoid that. Once prices stabilise, it may happen.

You are right to wonder are lithium-ion batteries becoming more expensive. It is true, but only in so far as everything seems to be at the moment. However, with companies like EVE who supply our batteries at EcoPowerDirect investing in research and development, batteries are getting better. That may mean that in the future they can be cheaper too.