Lithium-ion battery prices hit a record low last month and are expected to fall below $100 per kilowatt-hour (kWh) this year due to a significant supply-demand imbalance.
According to data from KOTRA and the International Energy Agency (IEA) released on June 21, average lithium-ion battery prices dropped to $112 per kWh in May, marking an all-time low. The continued slowdown in electric vehicle (EV) demand has led to persistent oversupply in the battery market.
Falling raw material costs and a growing share of low-cost batteries also contributed to the price drop. Global lithium production surged from 82,500 metric tons in 2020 to 240,000 metric tons in 2024. USGS reported an 18% increase in global lithium output last year. But demand hasn’t kept up, pushing prices down.
Adoption of lithium iron phosphate (LFP) batteries—known for their durability and safety—has accelerated. This shift toward mass production of cheaper LFP batteries has further pressured the prices of nickel-manganese-cobalt (NMC) batteries.
Industry forecasts indicate that the oversupply trend will continue throughout 2025. Global battery production capacity is expected to reach 2.5 times actual demand. China’s capacity alone could cover 92% of global battery needs.
Goldman Sachs projects lithium-ion battery prices to drop as low as $90 per kWh this year, down nearly 40% from last year’s average of $149.
