EV Battery Prices Expected to Fall 50% by 2026
Advances in battery technology and declining metal prices are expected to drive electric vehicle (EV) battery prices lower than previously anticipated, according to Goldman Sachs Research. Average global battery prices dropped from $153 per kilowatt-hour (kWh) in 2022 to $149 in 2023 and are projected to reach $111 by the end of this year, potentially decreasing to $80/kWh by 2026. This drop is due to innovations that improve energy density and reduce costs, as well as a decline in lithium and cobalt prices, which comprise about 60% of battery costs.
Two major battery types dominate the market: nickel-based lithium batteries and iron-based LFP batteries. Although solid-state batteries, which could offer higher energy density and safety, were anticipated to capture market share, they are delayed until later in the decade due to production challenges.
Despite barriers to entry in the battery industry—such as long R&D timelines, high production costs, and labor shortages—five established companies control 80% of the market, making competition difficult for newcomers.
While EVs are expected to achieve cost parity with gasoline vehicles by 2026, resale value concerns continue to influence consumer choices. However, Goldman Sachs anticipates that 2026 will mark the beginning of significant consumer-led EV adoption driven by economics, assuming stable oil prices and regulatory support in the short term.