As the electric vehicle (EV) market continues to develop, large fluctuations in battery prices have raised concerns among consumers about the future of EV pricing.
Starting in early 2022, the industry saw a surge in prices due to the rising costs of lithium carbonate and lithium hydroxide, essential ingredients in battery production. However, as raw material prices subsequently plummeted, the market entered a highly competitive phase, often referred to as a “price war.” This volatility has consumers wondering whether current prices represent a bottom or if they will fall further.
Goldman Sachs, a leading global investment bank, has analyzed the price trend of electric vehicle power batteries.
According to their forecast, the average price of power batteries has dropped from $153 per kilowatt-hour in 2022 to $149/kWh in 2023, and is expected to drop further to $111/kWh by the end of 2024. By 2026, battery costs are expected to drop by nearly half to $80/kWh.
Even without subsidies, such a sharp drop in battery prices is expected to make the cost of ownership of pure electric vehicles equal to that of traditional gasoline vehicles.
The impact of falling battery prices is not only on consumers’ purchasing decisions, but also of great significance to the field of new energy commercial vehicles.
Power batteries account for about 40% of the total cost of new energy commercial vehicles. The decline in battery prices will improve the overall economic efficiency of vehicles, especially operating costs. The operating costs of new energy commercial vehicles are already lower than those of traditional fuel vehicles. As battery prices continue to fall, the cost of maintaining and replacing batteries is also expected to fall, alleviating people’s long-standing concerns about the high costs of “three electrics” (batteries, motors, and electronic controls).
This changing landscape is likely to improve the economic efficiency of new energy commercial vehicles throughout their life cycle, making them increasingly attractive to users with high operational needs, such as logistics companies and individual drivers.
As battery prices continue to fall, the purchase and operating costs of used new energy logistics vehicles will fall, thereby improving their cost-effectiveness. This shift is expected to attract more logistics companies and cost-conscious individual drivers to adopt used new energy vehicles, stimulate market demand and enhance liquidity in the industry.
In addition, the downward trend in battery prices is expected to prompt automakers and related institutions to pay more attention to optimizing after-sales guarantee services.
The improvement of battery warranty policies and the improvement of after-sales service systems are expected to enhance consumers’ confidence in purchasing second-hand new energy logistics vehicles. As more individuals enter the market, the circulation of these vehicles will increase, further promoting market activity and liquidity.
In addition to the impact of cost and market dynamics, the decline in battery prices may also make extended-range models more popular. Currently, extended-range light trucks equipped with 100kWh batteries are emerging on the market. Industry experts say that these models are particularly sensitive to the decline in battery prices and are a complementary solution to pure electric light trucks. Pure electric models are more cost-effective, while extended-range light trucks have a longer range and are suitable for a variety of transportation needs such as urban distribution and cross-city logistics.
The ability of large-capacity extended-range light-duty trucks to meet the needs of various transportation scenarios, coupled with the expected decline in battery costs, has given them a favorable position in the market. As consumers increasingly seek versatile solutions that balance cost and performance, the market share of extended-range light-duty trucks is expected to grow, further enriching the electric vehicle landscape.
In summary, the electric vehicle market is in a transformational phase with falling battery prices and changing consumer preferences.
As the cost of power batteries continues to decline, the economics of new energy commercial vehicles will improve, attracting a wider range of users and stimulating market demand.
The expected rise of extended-range models further highlights the adaptability of the electric vehicle industry in meeting diverse transportation needs. As the industry progresses, establishing a sound evaluation standard and after-sales service system is essential to reduce transaction costs and risks, ultimately improving the liquidity of used new energy logistics vehicles. The future of electric vehicles is promising, and economics and efficiency are the top priorities for this dynamic market.
Post time: Dec-10-2024