Battery prices continue to fall but supply chains flatten the curve

The latest Battery Price Survey from Bloomberg NEF shows that the industry is coming into a period where the battery pack price curve is flattening. The answer to how prices can continue to decrease in a quickly maturing sector is no longer in the technology, but in the supply of critical materials.  

 Jon Regnart, APC’s Automotive Trend Strategist, says: 

The automotive battery industry is transitioning to a new phase of industrial development. Lithium ion batteries have been proven viable in a wide range of vehicles. Now, the challenge is to scale up the material supply chains at an unprecedented speed. At the Advanced Propulsion Centre we’ve benchmarked future battery pricing based on announcements in industry. While $80/kWh at the pack level by 2030 seems likely, this can only be achieved if key materials like nickel, lithium, graphite and cobalt are secured well in advance by OEMs and cell manufacturers at current or lower price points.

This image shows predictions for battery pack and cell costs for 2020, 2025 and 2030 based on announcements in industry. The overall trend of these, including the work by Bloomberg NEF and others, sees the price drop intersecting securing critical materials in the supply chain.  

There is a great deal of private investment activity to bring forward work that capitalises on a rapidly developing market for electrified vehicle technologies. In addition to the confidence shown by the private sector, public money is also being made available to help seize opportunities in this strategic industry.

To solve the conundrum of rising battery material demand, public funding is being made available to help seize opportunities in this strategic sector. Through the Automotive Transformation Fund, the APC has funded various feasibility studies that are looking at solving the battery supply chain challenges in the UK and Europe. These include: 

  • Cathodes: Building domestic production of lithium through awarding ATF feasibility studies to both Cornish Lithium and Green Lithium.
  • Anodes: Securing future anode production through ATF feasibility funding. Based in Sheffield, James Durrans & Sons is investigating graphitisation synthetic graphic. In addition, Talga Anode UK has recieved funding to assess the feasibility of establishing anode supply chains for the UK automotive Li-ion battery industry. 
  • Electrolytes: The APC is funding Mexichem through an ATF feasibility to assess the viability of producing electrolyte salts and additives in the UK. Funding has also been awarded to companies like Ilika Technologies in next generation solid state batteries.  
  • Separators: Funding Advanced Energy Minerals (UK) Ltd to produce high purity alumina that is a crucial coating material for separators.