A Goldman Sachs study says that technological advances that have enabled electric vehicle battery manufacturers to increase energy density, combined with a drop in the prices of the most sustainable metals, will drive battery prices to lower levels than previously expected.
According to the report, the innovations would enable innovation and cost reduction, as they have increased the energy density of batteries by 30% and reduced their costs by simplifying their structure.
Goldman Sachs explains that the drop in lithium and cobalt prices, which account for 60% of the cost of batteries, is key to cost reduction.
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He also notes that there has been a global drop in battery prices from $153 to $149 per kWh between 2022 and 2023, and it is projected to reach $80 per kWh by 2026.
Other Factors
The research projects cost parity with combustion vehicles, stating that by 2026, electric vehicles will reach the same costs as internal combustion vehicles in the United States without subsidies.
Goldman Sachs argues that the electric vehicle market has undergone dramatic changes in recent years, with a significant reduction in the cost of batteries, which are the most expensive component of these vehicles.
“This decline in prices has allowed companies such as Tesla to reduce the price of their cars, without losing profitability, a surprising situation considering inflation and global economic challenges,” the report adds.
One of the main factors behind the profitability of electric vehicles at lower prices is the reduction in the cost of batteries.
A few years ago, batteries accounted for 40% to 50% of the total cost of an electric vehicle. Today, however, for most models, batteries account for only about 20% of the cost of the vehicle.
