• Business Business

Price of critical resource plunges lower than it has in years — here's why it could be a game-changer

BloombergNEF notes this figure is the average price of all global markets.

BloombergNEF notes this figure is the average price of all global markets.

Photo Credit: iStock

A new clean energy report found that the price of lithium-ion batteries fell in the last year, becoming 20% cheaper than just 12 months ago. As reported by Canary Media, this price drop continues a steady decline in the cost of lithium batteries — and that's a win for clean energy tech and the planet.

According to a recent survey by clean energy research firm BloombergNEF, the average price of a lithium-ion battery pack fell to $115 per kilowatt-hour — the biggest price drop since 2017. The firm reports that lower component prices and economies of scale helped drive the decrease, among other factors.

BloombergNEF notes this figure is the average price of all global markets. Regionally, lithium-ion battery pack prices were lowest in China at $94 per kilowatt-hour. Packs in the U.S. and Europe were 31% and 48% higher, respectively. According to BloombergNEF, this stark price difference reflects the "relative immaturity of these markets, as well as higher production costs and lower volumes."

If you were going to purchase an EV, which of these factors would be most important to you?

Cost 💰

Battery range 🔋

Power and speed 💪

The way it looks 😎

Click your choice to see results and speak your mind.

Lithium-ion batteries are best known for powering electric vehicles and e-bikes. The batteries can also store solar and wind power for on-demand use, making them key to many clean energy innovations.

Though lithium-ion battery packs are reliable, cleaner energy sources — especially when replacing fossil fuels — the batteries aren't completely clean. Lithium is difficult to mine, which can be harmful to the environment and exploitative to workers. According to Euronews, mining lithium can lead to water overuse, soil and water degradation, biodiversity loss, damage to ecosystem functions, and an increase in planet-warming pollution. But, as of now, lithium-ion batteries are the best answer to the global reliance on highly polluting fossil fuels.

BloombergNEF reports that while demand for lithium batteries grew across all sectors in the past year, the EV market — the biggest demand-driver for lithium-ion batteries — actually grew more slowly in 2023 than in previous years. 

The firm, however, doesn't believe this indicates a problem for the future of EVs. BloombergNEF projects that lithium-ion battery prices will continue to drop, helping EVs "reach price parity" with gas-powered cars in upcoming years. It was noted that EVs have already reached price parity in China, where lower-cost lithium-ion batteries are more widely available.

Though prices in 2024 benefited from cheaper raw materials, these costs could rise in the next few years as "geopolitical tensions, tariffs on battery metals, and low prices stall new mining and refining projects," per BloombergNEF. However, the firm still expects lithium-ion battery pack prices to decrease by $3 per kilowatt-hour in 2025.

Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.


Cool Divider