Goldman Sachs has released a report predicting that the cost of electric vehicle (EV) batteries will drop by half by 2026. Nikhil Bhandari, co-head of the Asia Pacific Clean Energy division, explained the two key factors driving this reduction. The first is innovation, particularly advancements in high energy density and lower-cost battery technologies. The second factor is the significant decline in the cost of metals used in battery production.
The report also forecasts a 40% price drop between 2023 and 2030. Nikhil noted that cost savings are being realized as companies streamline the process of producing battery packs directly from cells. As battery prices fall, EV prices will also decrease, likely leading to a boost in sales. He mentioned that some consumers, who previously hesitated to sell electric vehicles, may now be encouraged to purchase more frequently, with some changing cars every three years.
Nikhil believes that the EV market will make a substantial economic impact by 2026 and anticipates strong consumer support for the shift.