Lithium-ion battery prices continue to drop, BloombergNEF finds

As the US EV sector adjusts to a reality without federal tax incentives, industry players are looking for ways to deliver more affordable EVs to the masses.

One trend that’s working in their favor: the falling price of lithium-ion batteries.

The volume-weighted average price for lithium-ion battery packs dropped 8% YoY to $108 per kilowatt-hour, according to BloombergNEF’s annual battery price survey, which tracks pack and cell price trends globally. What drove prices down? A combo of “continued manufacturing overcapacity, heightened competition, and the accelerating shift toward lower-cost lithium iron phosphate (LFP) chemistries,” according to analysts.

The upshot?

“Low prices are both good and bad news, depending on where you are and where you sit in the industry,” Evelina Stoikou, BNEF’s head of battery technologies and supply chains, told Tech Brew. “It’s definitely good for the consumers, who are able to see lower prices for end applications.”

“On the other side, these low costs create intense competition among the battery manufacturers,” she added. “If they’re not able to keep costs low, they might see hits on their margins.”

Key takeaways: BNEF clocked a downward trend across all sectors and regions, despite increases in metal prices. Higher adoption of LFP battery tech played a key role—and is slated to continue driving prices down.

“In the near term, we expect metal prices to actually go up, but higher adoption of LFP, we believe, is going to still offset that increase that is estimated,” Stoikou said.

LFP is among the next-gen battery chemistries that manufacturers aim to leverage to drive down costs. The cost of batteries is an important driver of EV prices because batteries make up a significant portion of the overall cost of the vehicle.

BNEF’s analysis showed LFP “consistently recording the lowest observed cell and pack prices,” at $36 per kilowatt-hour and $50 per kilowatt-hour, respectively.

On a regional basis, China saw the most significant YoY decrease: 13%. Prices dropped 8% in Europe and 4% in North America. And BNEF analysts expect a further global decline in pack prices of $3 per kilowatt-hour in 2026 as LFP tech takes off.

“We think that lower battery prices are going to have a beneficial effect for the EV sector,” Stoikou said. “In China, where battery prices are a lot lower and the industry is more mature…we actually see that a lot of EV models across segments are cheaper than comparable internal combustion engine cars, versus other regions where this is not the case and EVs come at a premium.”

Stationary storage: Amid slower EV demand, some automakers and battery manufacturers are turning to stationary energy storage as a way to shore up investments in battery manufacturing capacity and take advantage of growing demand for projects like data centers.

This segment showed the steepest YoY price decline: 45%, to $70 per kilowatt-hour.

“This is the sharpest drop across all segments,” per BNEF, “making stationary storage the lowest-priced segment for the first time.”