Lithium Price Spike Has Moderate Effect on Batteries

This article first appeared on the BNEF mobile app and the Bloomberg Terminal.

  • Doubling lithium prices could increase battery prices by 8%
  • However, increasing material energy density could compensate

Sensitivity of battery pack prices to key commodities

Source: Bloomberg New Energy Finance. Note: We assume a pack cost of $209/kWh and an NMC (111) chemistry. Prices are equivalent for one metric tonne of the metal stated. 

Battery prices have fallen in the past 12 months even as prices of lithium carbonate, or LCE, rose between 24-55 percent, and the cost of cobalt doubled. This may not last through next year. While battery prices have continued to fall, from $273/kWh in 2016 to $209/kWh this year, rising commodity prices could have more of an effect in 2018, when price spikes begin to filter through to battery makers, according to the latest analysis from Bloomberg New Energy Finance. Lithium at $250,000 a metric ton would increase overall pack prices by about 8 percent. However, increasing energy density of battery cells (a measure of the potency of active materials) may offset any increase in battery price.

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