Replacement electric car batteries getting cheaper – report
Despite a temporary spike in lithium prices in recent years, data suggests the cost of replacing an electric car battery is declining.
The cost of replacing the battery pack on a used electric vehicle is dropping, as the technology becomes more widespread.
Battery costs are often cited as a reason to avoid buying an electric car, however a new report from US electric car website Recurrent claims prices of batteries are continuing to fall.
Furthermore, replacing the battery in an electric car only occurred in 2.5 per cent of cases within its study group – with the majority of instances occurring on first-generation electric vehicles (EVs), which are now approximately 14 years old.
According to the report, a 2019 study by the Mack Institute for Innovation Management at the Wharton School for Business found EV batteries had declined 16 per cent between 2007 and 2019 – costing an average of $US161 per kWh ($AU241/kWh).
By late 2020, the average price of a battery had dropped to $US137/kWh ($AU205/kWh), according to a report from Bloomberg New Energy Finance at the time.
However, that trend did not continue.
In 2021, the price of lithium – a key ingredient of most car batteries – began to rise sharply, peaking in late 2022 before dropping approximately 20 per cent in early 2023. It has remained relatively stable since late 2023.
The latest study from Recurrent suggests the cost involved in replacing a battery pack depends on several factors, such as the popularity of the car, the availability of parts, and the demand in the market.
While prices for replacing a battery in a first-generation Nissan Leaf in North America dropped to approximately $US5500 ($AU8250) for a 40kWh battery in 2020 – equating to $US137/kWh before labour – prices have increased in recent years, to $US12,000 ($AU18,000) including labour.
For a BMW i3, used batteries are selling for approximately $US145/kWh ($AU218/kWh).
Recent data cited by the report claims Tesla Model 3 batteries are currently selling for between $US133 and $US161/kWh ($AU199-$241/kWh).
With the information in the report relating to the North American market, it's likely battery prices in Australia would be higher, given our country's remoteness and weak Australian dollar.
However, the trend over nearly two decades shows battery prices are indeed dropping – especially for used battery packs – and will likely continue to decline with the increasing number of new electric cars and the uptake in ownership.
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