🧵1/ Lithium-ion battery pack prices fell 6% year-on-year to $132 per kilowatt-hour (real 2021$). That's down 90% since 2010's $1240/kWh! But, there is much more to it than headline figures. Highlights from @BloombergNEF @JamesTFrith follow. bloomberg.com/news/articles/…
2/ On a volume-weighted average basis across the battery industry, prices fell to $132 per kilowatt-hour in 2021. This is down from $140/kWh in 2020 (in real 2021 dollars). The 6% drop isn’t as drastic as the 9% decline we had forecast last year. bloomberg.com/news/articles/…
3/ Why are this year’s prices higher than expected? The cost of raw materials used in the cathode — lithium, cobalt and nickel — and other key components including the electrolyte have risen this year, putting more pressure on the industry. bloomberg.com/news/articles/…
4/ Li-ion battery pack price increases have been more prominent in the second half of 2021, and even led to Chinese battery manufacturer BYD announcing a 20% battery price increase in November. bloomberg.com/news/articles/…
5/ That said - price increases "aren't as bad as I feared in September", says @JamesTFrith. 4 reasons:
1. Relatively low prices in 1H 21
2. More lithium ion phosphate used in 2021
3. Cathode chemistries using less cobalt
4. Commodity index-linked prices
bloomberg.com/news/articles/…
6/ Chart: 2021 all-in battery price ($132/kWh) is about the same as the pack price alone in 2015 ($130/kWh) bloomberg.com/news/articles/…
7/ Great quote from @JamesTFrith
"When I start talking about battery prices, I inevitably get a bunch of folks saying that these prices are unobtainable and unrealistic. However, this really depends on the sector you are working in and how big your order volumes are."
8/ Here's why: order scale and application all matter. Automakers with annual orders in the tens of gigawatt-hours are able to negotiate more competitive pricing. In 2021, battery-pack pricing reported to BNEF ranged from $85/kWh to $546/kWh.
9/ For a sense of pack price by sector:
E-bus/commercial (China) $101/kWh
BEV $118/kWh
Stationary storage $152/kWh
E-bus/commercial (ex-China) $330/kWh
PHEV $337/kWh
bloomberg.com/news/articles/…
10/ Conclusion (1): 2021 has been a wake-up call for the battery industry, with the realization that we are at a point now where prices may not necessarily fall every year.
11/ Conclusion (2): In the long run, says @JamesTFrith, "I’m still confident prices in 2030 will be close to half of what they are today, but it may not be smooth sailing to get there."
12/ Conclusion (3): For the moment, buyers, sellers, providers, developers need to concentrate on getting the industry through the next 18 months, to ensure the continued electrification of transport and other sectors / thanks again @JamesTFrith. End🧵 bloomberg.com/news/articles/…
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