According to the news portal Bloomberg’s analysis of its research in the form of the annual BloombergNEF report, the average cost per kilowatt-hour (kWh) of battery has once again decreased. Compared to the previous year, they dropped by around six percent, from an average of $140 in 2020 to $132 in 2021.

The fact that the cost reduction was not even more significant is mainly due to the increased raw material costs for battery cathodes, which rose dramatically, especially in the second half of the year. This affected cobalt, nickel, and lithium in particular. As a result, even Chinese battery producers such as BYD have announced a twenty percent price increase.

The overall cost reduction over the year has various reasons. On the one hand, more cost-effective battery combinations of lithium iron and phosphate were used predominantly. In addition, nickel-based battery cells often utilized cathode chemistries that require less cobalt.

Bloomberg remains optimistic about future battery costs and predicts that the cost per kWh could drop by up to 50 percent compared to today’s levels by 2030.

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