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According to Goldman Sachs research department, falling costs for electric vehicle batteries are benefiting lithium battery manufacturers and technologies such as LFP, while the wait for solid-state batteries is getting longer.
New analysis from Goldman Sachs Research points to further declines in battery prices, mirroring analysis of the broader industry and continuing trends over the past 18 months and beyond. The study also delves into the ongoing battle over battery chemistry, as the industry continues to see the expansion and refinement of lithium iron phosphate (LFP) chemistries.
The banks research arm focuses primarily on the electric vehicle side of the battery equation, noting that battery prices are down 25% from last year to $111 per kilowatt-hour (kWh), and that average battery prices are likely to fall to $80/kWh by 2026.
Additionally, the company said the global average price of batteries fell from $153 per kilowatt-hour (kWh) in 2022 to $149 in 2023, and is projected to drop to $111 by the end of 2024. The company expects prices to continue to decline through 2030.
The consequence is that stationary storage prices follow broader trends led by the electric vehicle battery market.
Nikhil Bhandari, co-head of Asia-Pacific Natural Resources and Clean Energy Research at Goldman Sachs Research, offered some relevant insights for the sector.
In terms of overall trends, Bhandari noted that battery costs in general are coming down due to metal prices and technical innovation, thanks to new products with 30% greater energy density, while production costs are falling with the shift to cell-to-pack technology seen in electric vehicles.
The associated chart breaks down the information in more detail.
The solid state is still absent
One of the most relevant questions and answers in the report concerned the current R&D push for lithium-ion and solid-state batteries, versus other concepts and materials. The wait for solid-state batteries may at least extend the life of existing lithium chemistries, and Goldmans forecasts see a push for LFP chemistry.
Goldman : Do you expect major battery types to outperform the competition?
Bhandari : In the future, well be talking about solid-state batteries, which could be a real game-changer because the technology can materially increase energy density and is slightly safer because theres no flammable liquid electrolyte.
We had expected that newer batteries, such as solid-state batteries, would take up 5-10% of the market, along with sodium-ion batteries, but that has not been the case. Solid-state batteries were originally supposed to be on the market by now, but have been delayed until later this decade due to difficulties in moving from laboratory scale to mass production.
Meanwhile, lithium-based chemistries will become increasingly potent, making it difficult for solid-state batteries to eventually replace current technology. In fact, we have increased our forecast for LFP batteries to increase their market share from 41% of the market to 45% by 2025, with advanced nickel batteries continuing to dominate the higher-energy competition. |
