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  • Writer's pictureSam Jaffe

Driving Down EV Battery Costs with Falling Lithium Prices





As the world progresses towards a more sustainable energy and transport future, the role of lithium in powering the transition towards electrification remains indispensable. In combination with this, for the EV revolution to take place, three things are needed: cheaper batteries, faster charging batteries and an increased amount of functioning EV chargers. From the status of the lithium market to the trends in lithium iron phosphate (LFP) battery prices, Addionics can further reduce battery costs to help accelerate EV adoption. 


The Lithium Market


Lithium, a crucial component of the growing EV industry, is experiencing fluctuating prices and evolving demand dynamics. The recent decline in lithium prices, plummeting from a record high of $81,360 per tonne in November 2022 to $20,782 per tonne in February 2024, underscores a substantial 67% decrease year-on-year. With lithium being a specialized commodity produced in limited quantities, it faces considerable price volatility due to its intricate supply chain and susceptibility to disruptions. Indeed, the combination of factors such as changes in consumer trends, geopolitical conditions, regulatory frameworks, and technological advancements significantly influences the lithium market's dynamics. As a result, the global demand for lithium could surpass 2.4 million metric tons of lithium carbonate by 2030, doubling the predicted figures for 2025. Furthermore, BloombergNEF anticipates a nearly fivefold surge in worldwide lithium demand by the decade's end, propelled by the growing need for batteries in EVs.






S&P Global Market Intelligence projects considerable growth in lithium supply until 2025, driven by the development of new mines, brine lakes, and expanded output from existing projects. However, concerns linger regarding the long-term equilibrium between demand and supply. While the market currently grapples with oversupply, as momentum builds, demand could eventually outstrip supply, leading to a resurgence in prices.




Trends in LFP Battery Prices 


Global Trends


In the case of LFP batteries, BNEF expects that 2024 will see average pack prices fall to $133/kWh. This will be due to the expectation that lithium, cobalt and nickel costs will drop, in addition to technological innovations and optimized manufacturing. Indeed, following 2023’s record low of $139/kWh, it’s predicted that the average pack will cost around $113/kWh in 2025 before falling to approximately $80/kWh by 2030. In terms of the LFP battery market, it was valued at $7398.6 million in 2024 while it’s expected to hit $13940 million by 2032, with a CAGR of 9.5% during the review period. Moreover, in China, the average LFP battery price has already heavily declined, currently standing at $70/kWh and with forecasts of $36/kWh expected for as early as next year.


Trends in China


On a global level, the top 3 LFP battery players comprise CATL, BYD and Gotion High tech. All headquartered in China, these key players hold a share of around 88% of the global market. CATL, the world’s biggest battery storage maker with 37.4% of the global market, is expected to reduce the cost per kWh of its LFP batteries by up to 50% by mid 2024, the equivalent of $56.47/kWh. Consequently, by the close of 2024, battery packs could be priced at half of their end-of-2023 rates. Indeed, this would pave the way for cheaper EVs as an average 60/kWh battery pack would drop from $6,776 to $3,388 in one year, saving OEMs over $3,000 per EV. Additionally, following an internal notice pressing its teams to further reduce costs, FinDreams, BYD’s battery manufacturing division, is aiming to match CATL.


Further Cost Reductions with Addionics


Though the price of batteries is currently on a downward trend, integrating Addionics’ technology can further contribute to this, bringing even more savings to both manufacturers and consumers. Furthermore, Addionics' chemistry-agnostic 3D Current Collectors for battery electrodes can lower the production costs of EV batteries by using smaller amounts of various materials. This drop-in solution is adaptable to both current and emerging battery chemistries, facilitating its integration into any manufacturing process without incurring extra manufacturing costs. By employing an AI-driven structural optimization algorithm, this technology seamlessly integrates software with battery hardware, to create a comprehensive and intelligent solution. This capability empowers large-scale EV manufacturers to realize considerable cost reductions while simultaneously increasing their profitability.


Find out more Addionics' technology or contact us for collaboration opportunities.


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