Paris [France], March 8: The global battery market is advancing rapidly as demand rises sharply and prices continue to decline, according to International Energy Agency (IEA).
In 2024, as electric car sales rose by 25% to 17 million, annual battery demand surpassed 1 terawatt-hour (TWh) - a historic milestone. At the same time, the average price of a battery pack for a battery electric car dropped below $100 per kilowatt-hour, commonly thought of as a key threshold for competing on cost with conventional models.
Cheaper battery minerals have been an important driver. Lithium prices, in particular, have dropped by more than 85% from their peak in 2022. However, rapid advancements in the battery industry itself are also supporting price declines. After years of investments, global battery manufacturing capacity reached 3 TWh in 2024, and the next five years could see another tripling of production capacity if all announced projects are built.
These trends point to a battery industry entering a new phase of its development. While markets used to be regionalised and small, they are now global and very large, and a range of technological approaches is giving way to standardisation. Looking ahead, economies of scale, partnerships along the supply chain, manufacturing efficiency, and the capacity to bring innovations swiftly to market will be crucial to compete. This will likely result in greater consolidation across the sector, which is simultaneously being reshaped by government-driven efforts to geographically diversify battery supply chains.
Today, China produces over three-quarters of batteries sold globally, and in 2024 average prices dropped faster there than anywhere else in the world, falling by nearly 30%. Batteries in China were reported to be cheaper than in Europe and North America by over 30% and 20%, respectively. Declining battery prices in recent years are a major reason why many electric vehicles (EVs) in China are now cheaper than their conventional counterparts.
Source: Emirates News Agency
