Goldman Sachs Research expects global average battery prices to fall to $111 per kilowatt-hour (kWh) by the end of 2024 and further in the years to come, paving the way for a consumer-led EV adoption phase.

What Happened: Global average battery prices declined from $153 per kWh in 2022 to $149 in 2023 and will fall to $111 by 2024-end, Goldman Sachs said in an article earlier this week.

The fall in prices, it said, will be spurred by technological advances that allow companies to increase energy density combined with a drop in battery metal prices such as lithium and cobalt from the highs it touched in the early 2020s.

While current leading battery types are lithium-based, in the future there will be solid-state batteries which will allow more energy density, according to the co-head of Goldman Sachs Research's Asia-Pacific Natural Resources and Clean Energy Research Nikhil Bhandari. Lithium-based chemistries will also get stronger in the meantime, he said.

By 2026, the average battery price could fall to $80/kWh, allowing battery electric vehicles to achieve cost of ownership parity with combustion engine-powered cars in the U.S. without subsidies, Goldman Sachs researchers said. Consumer-led EV adoption phase will begin then, according to Bhandari.

Why It Matters: Currently, customers pay a premium for EVs as compared to combustion engine vehicles.

According to Cox Automotive, the average transaction price of an EV in the U.S. was at $56,574 in August while that of a combustion engine vehicle was below $48,000.

In 2023, the EV share of the total U.S. vehicle market was 7.6%, up from 5.9% in 2022, according to Kelley Blue Book Estimates. While EV adoption is higher in states like California, it is dismal in states like North Dakota.

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