What is the cost of electric car battery?
Cost to Replace an EV Battery
If you own a plug-in hybrid or all-electric car, chances are you’ll never have to replace the battery pack. That’s a good thing, as the lithium-ion battery packs in EVs are not cheap. Here’s what you need to know about real-world battery replacement costs.
Replacing an EV Battery
Battery technology is changing at an astounding rate. The cost of batteries is going down and expected to continue to drop. Plus, EV battery packs have a warranty from the automaker of eight years or 100,000 miles. Add to that the fact that today’s batteries are built to last longer than the cars they serve. Chances are that you will sell your EV for another zero-emission vehicle long before you need to replace the battery.
But that’s not the question, is it? The question on the table today is, what would it cost to replace the battery pack in your EV? Let’s find out.
The Cost to Replace an EV Battery
Depending on the EV you drive, replacing the battery pack could be free if your car is still under warranty, or it could cost up to $20,000 depending on the make and model of car. It could also cost as little as $2,500 to replace the battery.
The batteries used in hybrid cars such as the Toyota Prius are smaller and less expensive to replace than the big heavy battery packs found in vehicles such as the Ford F-150 Lightning pickup truck or Tesla Model S. For instance, replacing the battery in a Prius might only cost you $2,700 while replacing the battery pack in that Tesla could set you back up to $20,000.
As of this writing, battery replacements are fairly rare and there isn’t much information out there on costs to replace EV batteries. So, consider that the cost of batteries will continue to drop as more people purchase EVs. The price you would pay today will be more than it would be if you replaced the battery ten years from now when it is showing signs of age through battery degradation.
The Department of Energy’s Vehicle Technologies Office estimates the cost of electric vehicle lithium-ion battery packs have declined 89 percent between 2008 and 2022, using 2022 constant dollars. A recent report by McKinsey & Company suggests that EV batteries could drop a further 70 percent in price by 2025. According to this study, the price of lithium-ion EV battery packs could fall from $500-$600 per kilowatt hour today to around $160 by 2025 due to a rise in EV sales and a drop in component prices.
Also keep in mind that EV manufacturers are turning to solid-state battery packs which are less expensive, last longer, and are capable of taking consumers over 500 miles on a charge.
Real-World Replacement Costs
So far, we have only talked about the replacement battery cost through the manufacturer. But third-party batteries could cost less. Companies such as hybrid2go and evsenhanced.com offer full-service battery replacement with lifetime warranties.
What would it cost to replace the battery in a few of America’s favorite all-electric cars, the Nissan Leaf and Chevy Bolt? As of this writing, the battery would cost approximately $6,200 for the Leaf and $16,000 for the Bolt. The popular BMW i3’s replacement battery runs around $13,500. However, you can find replacement batteries for both the Bolt and the i3 on eBay for as little as $2,500.
The vehicles that offer the most range, and therefore have the largest battery packs, obviously cost more to replace. The Tesla Model 3 will take you over 300 miles on a charge and the replacement battery costs around $16,000. Labor costs to replace that Tesla battery will run you an additional $2,300. That’s because swapping out the battery pack on most electric cars is a complicated task, similar to replacing the engine in a gasoline-powered car.
While the physical labor only takes a day or so, getting the replacement battery can take weeks. Also keep in mind that not all battery replacements mean that you need to replace the entire battery pack, Sometimes the mechanic can just replace the defective cells to save you time and money.
EV battery cost soared in 2022, hampering EV affordability
EV battery costs have soared in 2022 due to rising raw material and battery component prices, according to a Bloomberg New Energy Finance (BNEF) report.
The volume-weighted average for lithium-ion battery pack prices reached $151/kwh this year, a 7% increase over 2021, according to the report. It marks the first time average pack prices have increased since BNEF began tracking prices in 2010—and delays EV price parity with internal-combustion vehicles.
That figure represents an average across multiple battery end uses, including different types of electric vehicles, buses, and stationary energy storage, BNEF noted, adding that the specific average for EV packs was $138/kwh in 2022.
Nio 100-kwh battery pack
Average prices could have been even higher in 2022 if not for increased adoption of the lower-cost lithium iron phosphate (LFP) chemistry as an alternative to the nickel manganese cobalt (NMC) used by many manufacturers. On average, LFP battery cells were 20% cheaper than NMC cells, in part because they don’t require cobalt, one of the raw materials that saw significant prices increases in 2022, according to BNEF.
However, overall cost increases outpaced the increased adoption of LFP chemistry, according to BNEF. LFP also wasn’t immune to rising costs. On a pack basis, prices rose 27% in 2022, BNEF reported.
Battery price increases also come despite many recent battery manufacturing announcements, which will eventually increase supply but haven’t begun to affect the market yet. BNEF expects the market to stay on its current trajectory in 2023, predicting average pack prices of $152/kwh.
GM Ultium battery — cell stacking
BNEF expects battery costs to start dropping again in 2024, when more lithium mining and refining capacity will be online, reducing prices. It also predicts that batteries will hit $100/kwh—generally considered the point at which EVs can achieve price parity with gasoline cars—in 2026.
That prediction shows how far recent price spikes have set back EV affordability. Just a year ago, BNEF predicted that EV battery costs would fall under the $100/kwh mark in 2024. Wood Mackenzie, earlier in 2021, agreed—but it said $60/kwh is the real target for pushing EVs past cost parity with gasoline vehicles. That will help bypass the idea that EVs might still cost more to build, battery aside.
Ipsos, in 2020, found that cost, more than charging, was the biggest barrier to EV adoption. That was mostly before the surge of the past two years that’s affected new and used EV prices, however.
Electric vehicle batteries would have cost as much as a million dollars in the 1990s
Most of us underestimate how quickly electric vehicles (EVs) will take over the car market. Sales data from the last few years gives us some clues. Almost 10% of cars sold in 2021 were electric. That might seem small, but consider how fast this is growing: the year before it was 4%, and just 2.5% in 2019. In many countries, this percentage is much more: in Norway, almost 90% of cars sold in 2021 were electric; in the Netherlands, it was one-in-three, and in the UK and Portugal, one-in-five. It was 16% in China, tripling from 5% the year before. That’s not all: the world has already passed the ‘peak’ of fossil car sales. And many countries have set a deadline to phase out petrol cars within the next decade. This has happened incredibly quickly. EVs were on the fringe for a long time – a luxury for the rich, or the engineering nerds – but are now mainstream. Why? It’s mostly down to the plummeting cost of batteries. They have only become cost-competitive in the last few years. I wanted to see how much the cost of electric vehicles has changed over time. What would one have cost in the 1990s, or the early 2000s? It was impossible to find a chart or dataset of these estimates. First, battery costs are nearly always given per unit of battery capacity (such as kilowatt-hours). Even then, I struggled to find a long-run, updated series on battery prices. Second, I didn’t just want these numbers per unit: I wanted a sense of how much an actual car battery would cost. So I reconstructed my own series and did some back-of-the-envelope calculations to estimate how much EV batteries would have cost from the 1990s onwards. My sources, methodology and assumptions are at the end of the article. I’ve done this for two cars: the Tesla Model S (which has a 75 kWh battery), and the more affordable Nissan Leaf (with a 40 kWh battery). I should stress that these are crude estimates: there was no Tesla car or Nissan Leaf in the 1990s. It’s just a fun thought experiment that gives us an important insight into how the landscape of electric cars has been transformed.
Battery costs have fallen by more than 98% since 1991
The battery in a Tesla Model S costs around $12,000 today. In the early 1990s, it would have cost just shy of a million dollars. The battery in a Nissan Leaf is smaller and costs around $6,000 today. In the early 1990s, it would have cost almost half a million dollars. I did some sense-checks to make sure my calculations were credible. My recent estimates are very close to the actual prices. In October 2022, the Tesla Model S battery cost $12,000 to $13,000. The Nissan Leaf battery cost $5,500 in 2020. You can see the decline in the estimated cost of these batteries in the chart. These prices are adjusted for inflation.
In the last 30 years, the price has fallen by more than 98%. EVs didn’t stand a chance of making it commercially until the last few years. Even a decade ago, the battery alone would have cost between $30,000 and $60,000. The total price of the car would have been even more than that.
How did the price of batteries fall so quickly?
Why did the cost of batteries fall so quickly? Mostly the learning that comes from the deployment and scale-up of technologies. We’ve worked out how to make lithium-ion batteries much more energy-dense – this means they get more electrical energy per liter (or unit) of battery. In 1991 you could only get 200 watt-hours (Wh) of capacity per liter of battery.
You can now get over 700 Wh. That’s a 3.4-fold increase. They’re not just cheaper, they’re much smaller and lighter too. Batteries have followed what we call a ‘learning curve’, where the more you build, the cheaper they become. For every doubling in battery capacity, prices fell around 19%. This is very similar to the 20% learning rate of solar PV modules.
These trends should make us optimistic about the energy transition
- They are looking at data that’s older than the last few years;
- or, they’re looking at absolute numbers rather than growth rates.
If you’re looking at data on technological transitions from 2015, 2016, or even 2018, then you’re well behind the times. No wonder nothing was happening: these technologies would have emptied everyone’s pockets. To understand the potential of low-carbon technologies you need to look at the last few years. This is when they’ve been cost-competitive enough to get a space on the road.
And if you’re focusing on absolute numbers: how many of our existing cars are electric, or what the total capacity of batteries is, then you’ll be disappointed. But this tech has only had a few years of being competitive – of course it’s not going to dominate the market yet.
The transition to electric vehicles is here, and could happen extremely quickly. This is not only better for the climate (regardless of the electricity source), it’s better for local air pollution, and also provides a much better driving experience.
If this decline in cost continues, it will soon be much better for consumers’ wallets too.
The basis of these estimates is simple: if we know the unit cost of batteries – how much they cost per kilowatt-hour – we can multiply this by the size of the battery in an electric vehicle to get the total cost.
Battery prices per kilowatt-hour
First, we need a long-run, standardised series of lithium-ion battery costs per kWh. This was impossible to find, so I had to combine sources and do some conversions to get it all in comparable $2022 prices.
Data from 1991 to 2012 comes from the work by Ziegler and Trancik (2021).
I had to do two conversions to these figures:
- They were initially given in $2018 prices. I converted them to $2022 using a conversion factor of 1.192.
- They gave the cost of battery cells only. We need the total cost, which includes both the battery cell and pack. Looking at data from from BloombergNEF over the last decade, I calculated that the cells are around 72% of the total cost of the battery. So, I adjusted the “cell only” price for the entire series by dividing by 72% and multiplying by 100%.
This is one assumption that I’m uncertain about: I’m having to assume that 72% is a reasonable estimate for the ratio of cells-to-packs since the 1990s. in prices in the 1990s and early 2000s.
Data from 2013 to 2022 comes from BloombergNEF . This provides the combined price of cells and packs, and prices are given in $2022. So these figures were taken straight from the source.
This gave me a combined series of the unit cost of lithium-ion batteries from 1991 to 2022 in $2022. I’ve plotted it as a chart here . And here is the logarithmic version.
Calculating the cost of EV batteries
Now that we have the unit cost of batteries, we can multiply it by the size of EV batteries.
The Tesla Model S has a 75 kWh battery. The Nissan Leaf has a 40 kWh one.
To get the estimated total costs, we just multiply the battery unit cost series by 75 and 40 kWh for the Tesla and Nissan Leaf, respectively.
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