Lithium-ion battery pack prices have fallen 8 per cent in the last year to a new record low of $US108 per kilowatt-hour (kWh), despite an increase in battery metal costs and the sluggish ramp-up of local production in North America and Europe.
New research published this week by energy research provider BloombergNEF (BNEF) pointed specifically to continued overcapacity in cell manufacturing, intense global competition, and the ongoing shift to lower-cost lithium iron phosphate (LFP) batteries as the main factors driving down the cost of pack prices.
This came in the face of rising metal prices throughout the year caused by supply risks at certain Chinese lithium assets, as well as new cobalt export quotas in the Democratic Republic of Congo.
However, as BNEF explain, these higher metal prices “did not translate to higher annual prices for cells or packs” with the industry absorbing the price shocks through increased adoption of LFP battery packs, long-term contracts, and “broader hedging strategies”.
BNEF’s 2025 Lithium-Ion Battery Price Survey covers multiple battery end-uses, including different types of electric vehicles and stationary storage projects, as well as different battery chemistries.
And, with each sector typically requiring different cells and packs depending on the requirements, pricing varies dramatically across the industry and its various use cases.
For example, while the average lithium-ion battery pack price dropped to $US108/kWh, prices for stationary storage battery packs dropped to $US70/kWh, 45 per cent lower than in 2024, representing the sharpest drop across all segments and ensuring that stationary storage was the lowest-priced segment for the first time.
This helps explain the huge boost in battery storage projects in Australia, and the sudden popularity of solar-battery hybrid projects that allows solar power to be stored on site and fed into the grid in the evening peaks.
Battery packs for battery electric vehicles (BEVs) were the cheapest in the transport segment, reaching $US99/kWh, the second time that they fell below the $US100/kWh threshold.
In terms of battery chemistries, the average price for LFP battery packs across all segments reached $US81/kWh, while nickel manganese cobalt (NMC) packs were at $128/kWh.
Overcapacity was, unsurprisingly, centred in China, where battery cell manufacturers are consistently producing more cells than are needed for domestic electric vehicle (EV) and stationary storage demand, resulting in intense competition among the manufacturers.
Average battery pack prices were lowest in China, down to only $US84/kWh after a 13 per cent drop in real terms from 2024.
Conversely, battery pack prices were 44 per cent and 56 per cent higher in North America and Europe respectively, reflecting the higher local production costs in each region and a greater dependence on imported batteries.
Pack prices dropped 4 per cent and 8 per cent respectively in North America and Europe, with Europe edging ahead of its trans-Atlantic neighbour thanks to a steadier legislative environment compared to the changing policy and tariff environment in the United States.
The confused environment in the United States also caused Chinese companies to redirect their exports to Europe with aggressive pricing strategies to maintain global sales volumes and meet their annual targets. This shift led to intensified price competition in Europe.
“Cut-throat competition is making batteries cheaper every year,” said Evelina Stoikou, the head of BNEF’s battery technology team and lead author of the report.
“This is an important moment for the industry, as record-low battery prices create an opportunity to lower EV costs and accelerate the deployment of grid-scale storage to support renewables integration around the world.”
