Falling prices of critical minerals will lead to a 40% drop in the cost of batteries for electric vehicles by 2025, with big implications for the pace of global EV adoption, says Goldman Sachs Research.
“The reduction in battery costs could lead to more competitive EV pricing, more extensive consumer adoption, and further growth in the total addressable markets for EVs and batteries,” Nikhil Bhandari, co-head of Goldman Sachs Research’s Asia-Pacific natural resources and clean energy research team, said in the report.
Battery pack prices are expected to drop an average of 11% each year from 2023 to 2030. By 2025, the EV market could achieve cost parity with internal combustion engine (ICE) vehicles, the team found—without subsidies.
Goldman Sachs Research says battery prices are expected to fall to $99 per kilowatt hour of storage capacity by 2025, a 40% decrease from 2022. It’s a faster pace than they expected, with an earlier forecast showing the decline to be nearer 33%.
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