Battery Pack Prices May Rise 15% This Year

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Electric vehicle growth trends

Electric vehicle growth trends

According to the "Global Electric Vehicle Outlook 2022" report released by the International Energy Agency (IEA) on May 23, about 6.6 million electric vehicles were sold globally in 2021, almost double that of 2020; It accounts for 10%, which is 4 times the market share in 2019. In 2021, the total number of electric vehicles on the world's roads reached about 16.5 million, double the number in 2018.

Among them, in 2021, the Chinese market contributed about half of the sales of electric vehicles, reaching 3.3 million units, which exceeded the global sales of electric vehicles in 2020.

In the first quarter of 2022, global electric vehicle sales continued to grow strongly, with a year-on-year growth rate of 75%. Among them, sales in China have more than doubled compared to the same period in 2021, with a 60% increase in the United States and a 25% increase in Europe.

In the first quarter of 2022, global electric vehicle sales continued to grow strongly, with a year-on-year growth rate of 75%. Among them, sales in China have more than doubled compared to the same period in 2021, with a 60% increase in the United States and a 25% increase in Europe.

Continued support policies are key drivers for EV sales growth. Global public spending on EV subsidies and incentives will nearly double to nearly $30 billion in 2021. A growing number of countries have committed to phasing out internal combustion engines in the coming decades or setting ambitious vehicle electrification targets. At the same time, many automakers are accelerating their transition to electrification, often further than policy targets. In addition, the number of electric vehicle models offered by automakers increased to about 450 in 2021, a five-fold increase since 2015, increasing the appeal to consumers.

Under the IEA's established policy scenario, the global number of electric vehicles is expected to reach about 200 million in 2030 (about 11 times the current electric vehicle population), accounting for more than 20% of global vehicle sales.)

Battery prices rise

Battery prices rise

The IEA also noted that tight supply and the risk of rising costs could slow growth in the electric vehicle segment. From early 2021 to May 2022, lithium prices rose more than sevenfold, cobalt prices more than doubled, and nickel prices nearly doubled (to their highest level in nearly a decade).

According to IEA analysis, since 2021, under the surge in battery demand, the sharp rise in the price of the above-mentioned battery metal materials is mainly affected by three factors: first, the pressure on the production side brought about by the epidemic; second, concerns about the supply of primary nickel in Russia; From 2018 to 2020, the price of battery metal materials is at a low level, and investment enthusiasm is not high.

The IEA said battery prices, while down 6% in 2021 to $132/kW, were lower than the 13% decline in 2020 due to higher material prices. If battery metal material prices in 2022 remain at the same level as in the first quarter, other things being equal, battery pack prices will be 15% more expensive than in 2021.

Price increases are usually accompanied by an increase in the supply of new mines or an extension of the life of existing mines. Sustained high battery metal prices could spur massive supply-side investment to make up for the underinvestment during the downturn in commodity prices. The IEA predicts that lithium production will need to increase sixfold and the number of new mines to reach 50 by 2030 to meet growing demand.

About Vodno

Vodno Technology Co., Ltd. was founded in 2010, the predecessor of the lithium material, electric bike battery and the core production-based manufacturers, after nearly seven years of development, has developed into a product design and development,?battery solutions and electronic circuit program Design, battery production and quality control, sales in one of the high-tech company.  To learn more about lithium batteries, please kindly contact us immediately.

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