Chart: Lithium-ion battery prices are falling again

Recent data reveals a significant decline in lithium-ion battery prices, with global pack prices plummeting 14% this year to an unprecedented low of $139 per kilowatt-hour, as reported by BNEF. This decline follows a period marked by the Covid pandemic, where the industry experienced stagnation. As lithium prices eased and components became less expensive, major new battery factories began operations. Demand for batteries surged by an astonishing 53% this year, although it still didn't meet certain manufacturers' expectations, resulting in further price reductions.

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The $139 per kilowatt-hour benchmark represents a combination of various battery types, including electric vehicles, stationary grid storage, and buses. Among these, electric vehicle packs, which are produced at the largest scale, have reached a cost of just $128 per kilowatt-hour. This metric is crucial as batteries constitute a significant portion of electric vehicle costs; therefore, more affordable batteries translate to lower EV prices. Additionally, as grid storage becomes cheaper, it enhances the feasibility of utilizing renewable energy during non-peak hours.

How low do battery prices need to go? Within the electric vehicle sector, experts have often suggested that achieving the $100-per-kilowatt-hour threshold would guarantee cost-competitiveness. The U.S. Department of Energy has set a more ambitious target of $80 per kilowatt-hour for manufacturing costs of battery packs intended for 300-mile range electric vehicles as part of its Energy Storage Grand Challenge.

Should the price decline trend continue at the same rate as this year, it is anticipated that the industry could break through the $100 per kilowatt-hour mark within a few years, making the DOE's goal seem highly attainable.

Electric Car Battery Replacement Costs

This is part of an informative series focusing on EV batteries and their degradation. Here are additional resources for those looking to delve deeper.

How much does an EV battery replacement cost?

When outside of warranty, electric car battery replacements can cost anywhere from $6,500 to $20,000, depending on the manufacturer and battery size; however, these out-of-pocket expenses are generally rare.

This rarity can be attributed to the unexpected longevity of EV batteries. In the Recurrent community, the overall replacement rate stands at just 2.5%, with the majority of replacements occurring among the first generation of EVs currently on the roads, which are now 14 years old.

Are replacement costs going up or down?

Battery costs are known for their fluctuations, rising in some months and falling in others; yet the overall trend indicates a steady decline.

As battery prices fall, the cost you would incur today could significantly differ from what you might pay next year or in five years. In 2021, research from the Mack Institute for Innovation Management at the Wharton School aggregated data from various sources, uncovering a 16% drop in battery pack costs from 2020 to 2021. It was estimated that by 2021, battery packs averaged approximately $161/kWh. Based on that estimation, by 2026, the cost to replace an out-of-warranty 100 kWh battery—typical in Tesla's long-range vehicles—would reach around $16,100, excluding taxes and labor. If the trend of battery price reductions persists, it's projected that by 2030, pricing could arrive at approximately $56/kWh, translating to $5,600 for a 100 kWh battery replacement.

This represents a significant shift in the costs associated with EV battery replacements.

It’s important to note, however, that the broader market trend of decreasing lithium prices encountered some disruptions in 2021, resulting in minor increases in the costs of certain battery components.

As of March 2022, however, prices began to decrease again, showing a nearly 20% reduction since the year's start. Continued high demand for older lithium-ion batteries is likely to keep replacement prices stable for at least another year.

How are battery replacement costs determined?

The cost of an electric vehicle battery can constitute up to half of the vehicle's total value, which is influenced by vehicle type (luxury versus economy) and battery size—larger batteries require more minerals and incur higher production costs.

According to an April 2022 report by the International Council on Clean Transportation (ICCT), projected costs by 2025 could be between $120/kWh and $135/kWh. This forecast seems less optimistic than the Wharton analysis, indicating a potential out-of-warranty replacement cost for a 100 kWh battery may be as high as $13,500 by 2025.

The ICCT report also acknowledges that battery cost forecasting often underestimates actual reductions in battery prices. The report suggests, if analyzed more favorably, costs could drop to $89/kWh by 2030 and $56/kWh by 2035.

Recent predictions from Bloomberg New Energy Finance (BNEF) indicate that as of December 2021, the average price of battery capacity was $137/kWh, and they forecast an anticipated average price nearing $100/kWh by 2027—seven years earlier than previous BNEF modeling suggested. According to the ICCT report, BNEF projections estimate average pack-level costs will reach $62/kWh by 2030, suggesting that a 100 kWh battery pack would be priced at a minimum of $6,200 to replace.

Back in 2010, McKinsey had reported an average battery pack price of approximately $227/kWh, predicting that average EV battery pack prices would drop below $190/kWh by the end of 2023. As demonstrated, those expectations were distinctly surpassed by the data revealed in the Bloomberg NEF report.

Does car insurance cover an EV battery replacement?

Typically, standard car insurance does not cover replacement costs unless the vehicle was involved in an accident or suffered damage requiring a battery replacement.

Unexpected battery failures often fall under the manufacturer's warranty or most extended warranties. For those concerned about battery health, Recurrent has various partners that offer extended EV warranties.

What are some real-world cost examples?

The actual cost of an electric vehicle battery goes beyond the battery pack itself. The total expense will include labor costs, taxes, business models, and additional external factors tied to battery replacements. Other variables like business profits and markups are not factored in, nor is there consideration on whether a vehicle purchased in 2021 will benefit from anticipated battery pack cost reductions by 2025.

Furthermore, this analysis does not take into account the potential for replacing only parts of battery packs that may fail, which might be covered under warranty. Also, the development of independent third-party battery replacement services separate from original manufacturers remains hard to anticipate.

Nevertheless, for insight into real-world battery replacement costs experienced by EV drivers, we gathered some notable examples. Generally, it seems EV owners are not reaping benefits from the reported Bloomberg average of $137/kWh.

Here are some findings concerning specific electric vehicles:

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• BMW i3
• Chevrolet Bolt
• Chevrolet Volt
• Hyundai Ioniq PHEV
• Nissan Leaf
• Tesla Model 3
• Tesla Model S
• VW e-Golf

We have plenty of information detailed about each of these vehicles. Continue scrolling for further specifics!

BMW i3 Battery Replacement Cost

• A BMW i3 battery pack that originally had 22 kWh capacity, now estimated at approximately 17.14 kWh, is currently listed on eBay for $2,500. This amounts to about $145/kWh.
• In 2020, BMW revealed that the cost to replace an i3 battery would be around $16,000, equating to $727 per kWh based on the 22 kWh packs during the 2014-2018 model years.
• InsideEV cited a 2021 cost of $13,725 for a 21.6 kWh battery pack, resulting in a cost of roughly $635/kWh, derived from an online parts ordering store.
• We have created a complete guide regarding i3 battery replacements.

Chevy Bolt Battery Replacement Cost

As many may know, all Chevy Bolt batteries are currently subject to replacement under a recall due to manufacturing defects. However, previous data can offer insight into anticipated replacement costs.

• A November 2021 post on chevybolt.org mentioned that a dealership quoted a Chevy Bolt owner $16,250 for battery replacement, with an additional $870 in labor. Given that Bolt batteries are rated at 60 kWh, this pricing equates to about $271/kWh, which is approximately 68% higher than the average reported battery price.
• Chevrolet reported that in 2020, the cost of a battery pack for a Chevy Bolt was approximately $262/kWh.
• According to a Greencars report, a 66 kWh Chevrolet Bolt battery costs around $16,000, translating to $250/kWh.

Chevy Volt Battery Replacement Cost

• A Greencars report indicated that replacing a 16 kWh Chevy Volt battery would cost roughly $4,000, or about $240/kWh.
• A -year old remanufactured battery pack for the Chevy Volt is priced at $6,000 from Greentec Auto. These batteries have a capacity of 17.1 kWh, which puts the cost at $350/kWh in 2021 dollars. A new-module battery pack of the same type is priced at $8,000, totaling approximately $467/kWh in 2021.
• For the -year Chevy Volt, batteries are priced approximately $3,000 on eBay. These packs have an 18.4 kWh capacity, equating to costs ranging from $163- to $152/kWh.
• Volts can have extended waitlists for battery replacements.

Hyundai Ioniq PHEV Replacement Cost

A replacement battery for the 2021 or 2022 Hyundai Ioniq Hybrid has an MSRP of $2,853.53, which translates to roughly $1,829/kWh, about % more than the cited average of $137/kWh.

Nissan Leaf Battery Replacement Cost

An extensive guide dedicated to Nissan Leaf battery replacements is available. While some of the shared information overlaps, it is useful to gain an in-depth understanding.

As of January 30, 2022, forum posts in MyNissanLeaf.com reveal that labor and replacement of a 24 kWh battery can run approximately $5,500, which breaks down to about $4,500 for just the battery, resulting in approximately $187/kWh—36% above the quoted average of $137/kWh.

• Conferring with Greencars reports, a 40 kWh Nissan Leaf battery costs around $5,500, which is right on target for the average pricing.
• A Canadian Leaf owner reported a dealership quoting a $15,000 CAD battery replacement cost.

Per data from Cashcarbuyers, replacement prices for a Leaf's battery pack without labor are listed as follows:

• The cost of a 30 kWh pack ranges from $3,500 to $4,500, approximately $150/kWh.
• The price for a 40 kWh pack ranges from $6,500 to $7,500, around $187.5/kWh.
• A 62 kWh battery pack is anticipated to fall between $8,500 and $9,500, equating to $153/kWh.

However, anecdotal evidence from our Recurrent drivers over recent years shows that demand for Leaf replacements—and the related pricing—has escalated significantly since 2021. In a dedicated Facebook group for Leaf battery replacements, reports indicate that swapping a 24 kWh pack for a 62 kWh model retails for approximately $19,000. In Atlanta, costs for replacement packs, inclusive of installation, stand at about $12,000 for a 40 kWh pack and $16,500 for a 62 kWh, making those prices range from $266 to $300/kWh, considering labor.

Tesla Model 3 Battery Replacement Cost

According to Current Automotive, one customer's receipt for a replacement of a remanufactured 75 kWh battery in a Tesla Model 3 is as follows:

• Battery: $13,500
• Labor: $2,299.27
• Total: $15,799.27

This results in a cost of $180/kWh, approximately 31% above the reported average of $137/kWh. Due to the recency of Tesla Model 3s in the market, data related to repair costs remains quite limited.

However, incidences that necessitate battery replacements in a Model 3 typically involve accidents. The total replacement costs have recently decreased, averaging between $10,000 and $12,000, with 80-90% of that going to the battery itself. Fortunately, the total price has lowered, falling between $133/kWh and $161/kWh, aligning closer with the Bloomberg estimate.

Tesla Model S Battery Replacement Cost

We have also produced an article focusing on Tesla battery replacements, which you may find beneficial; however, here's a brief summary:

• As of April 2021, FindMyElectric reported isolated cases where battery prices ranged from $12,000 to $15,000.
• A Tesla Model S owner reported a complete battery pack replacement cost of $20,000, including labor as of December 2021.
• Reports on Tesla Motors Club, as of late 2021, indicate that two owners of Model S (2014 and 2015) encountered quotes of $22,000 for full battery replacements outside of warranty.

VW e-Golf Battery Replacement Cost

The cost to replace a battery for a 2017-2019 VW e-Golf, as of August 2021, is quoted at $23,442.91 by Pignataro VW. Given that the e-Golf battery pack is 35.8 kWh, that amounts to a startling $654/kWh, representing a staggering 477% above the average price.

Proactive tips to avoid replacement and costly service

It's not surprising that taking proper care of your battery can significantly prolong its lifespan and delay replacement needs. Here are practical suggestions for providing your battery with the care it requires:

• Avoid extremely low or high battery levels.
• Limit DC fast charging to occasions when necessary.
• Frequent smaller charges are more favorable than sporadic large charges.
• When possible, let your battery reach room temperature before charging; this is typically managed by your vehicle once plugged in.
• During warmer months, park in shaded areas to help maintain your battery temperature.
• A/C and heating systems can consume considerable energy; consider preheating while charging or utilizing seat warmers.
• Accelerate gradually to maximize range efficiency.
• Avoid excessive speeds on highways.
• Review your manual for battery maintenance tips.
• Use more energy-efficient tires, especially those appropriate for the season.

Are you an EV owner concerned about how much an EV battery costs?

Join the Recurrent EV community to receive personalized battery reports tailored to your vehicle. Not only do these reports provide valuable insights into the state of your EV, but they also connect you with a rapidly growing community of EV owners aiming to support one another in benefiting from the advantages of owning electric vehicles!

If you wish to explore more, feel free to visit our website at Lithium Battery.