Significant Drop in Electric Vehicle Battery Costs in the US

TapTechNews August 13th news, according to the latest research from the Vehicle Technology Office of the US Department of Energy (DOE), from 2008 to 2023, the cost of electric vehicle batteries has significantly dropped by 90%, which provides strong support for automakers to narrow the price gap between electric vehicles and fuel vehicles.

The size, weight and cost of battery packs are key factors in the production of electric vehicles. In recent years, thanks to the improvement of battery technology and chemical composition, the application of new manufacturing processes, and the significant increase in production volume, the battery cost has continued to decline.

DOE data shows that the cost of lithium-ion battery packs has dropped from $1415 per kilowatt-hour in 2008 to $139 per kilowatt-hour in 2023. Especially during the period from 2009 to 2013, the reduction was very huge.

According to TapTechNews' understanding, this research is evaluated for light vehicles with an annual production of at least 100,000. Taking the Tesla Model Y as an example, the cost of its 81-kilowatt-hour battery pack was as high as $114,615 in 2008, but only $11,259 in 2023.

Automakers expect battery costs to continue to decline in the next few years, making the production of affordable electric vehicles a reality. A study by market research firm Gartner shows that by 2027, the production cost of electric vehicles will be lower than that of fuel vehicles. Many companies predict that electric vehicles and fuel vehicles will achieve the same cost by the end of this decade.

Lower production costs and lower suggested retail prices will save a lot of money for electric vehicle consumers, especially considering the overall cost of ownership of the vehicle. According to a latest study by J.D. Power, in 48 of the 50 states in the US, the five-year total cost of electric vehicles is already lower than that of fuel vehicles.