It wasn’t long ago rising demand and component shortages sparked concern that “greenflation” would drive up prices for the batteries used in electric vehicles. That’s subsiding as prices cool for battery metals, which could help make EVs more competitive with traditional cars more quickly.
Goldman Sachs Research now expects battery prices to fall to $99 per kilowatt hour (kWh) of storage capacity by 2025 — a 40% decrease from 2022 (the previous forecast was for a 33% decline). Our analysts estimate that almost half of the decline will come from declining prices of EV raw materials such as lithium, nickel, and cobalt. Battery pack prices are now expected to fall by an average of 11% per year from 2023 to 2030, writes Nikhil Bhandari, co-head of Goldman Sachs Research’s Asia-Pacific Natural Resources and Clean Energy Research, in the team’s report.
As battery prices fall, Goldman Sachs Research estimates the EV market could achieve cost parity, without subsidies, with internal combustion engine (ICE) vehicles around the middle of this decade on a total-cost-of-ownership basis.
“The reduction in battery costs could lead to more competitive EV pricing, more extensive consumer adoption, and further growth in the total addressable markets for EVs and batteries,” says Bhandari.
The EV market was initially driven by regulatory support around the world, but global EV penetration is starting to retreat from recent highs, a potential driver of which could be governments in Europe and China cutting back on subsidies.
Still, our analysts see the EV market transitioning to a new phase that is more heavily influenced by consumer adoption than government largesse as battery prices drop. The team’s base case estimate for global EV penetration jumps to 17% in 2025 from just 2% in 2020, and to 35% and 63% by 2030 and 2040, respectively. But its “hyper adoption” scenario sees EVs accounting for 21% of total global vehicle sales by 2025, 47% by 2030, and 86% by 2040.
Kia launched its new EV5 electric SUV in China Friday. With a starting price of around $20K (149,800 yuan), the EV5 is expected to take on market leaders, including Tesla’s Model Y.
Can Kia compete in the world’s largest EV market? The South Korean automaker hopes to achieve that with its new compact electric SUV.
Kia officially unveiled the EV5 in August as a family-friendly electric SUV. After opening pre-orders in China on August 25, Kia revealed prices would be much lower than expected.
Although local reports expected starting prices of around $40,000 (300,000 yuan), Kia is launching the EV5 at half that.
The EV5 officially launched Wednesday with a starting price of $20,700 (149,800 yuan). That significantly undercuts the Tesla’s Model Y, starting at 266,400 yuan ($37,000).
My wife has a vertebral disc issue that means that we’ll need a wide drivers seat with a low between seat console and that pretty much puts present Teslas out of the picture. I’m hoping that one of the other manufacturers will have a suitable model.