The clean energy transition has reached a pivotal milestone. According to BloombergNEF’s latest annual survey, lithium-ion battery prices have fallen to $108 per kilowatt-hour (kWh) in 2025—an 8% year-on-year decline. This marks the lowest level in history and signals a new era of affordability for electric vehicles and energy storage systems.
China continues to dominate the low-cost battery market, with average prices dropping 13% to $84/kWh. This competitive edge stems from:
•Massive manufacturing scale and overcapacity.
•Strong adoption of cost-effective lithium iron phosphate (LFP) chemistry.
•Intense competition among local suppliers.
In contrast, battery pack prices in North America and Europe remain 44% and 56% higher, respectively—highlighting the challenges Western automakers face in achieving price parity with conventional vehicles.
Despite rising prices for cobalt and lithium, the battery industry demonstrated remarkable resilience in 2025. Key buffering factors include:
•Shift to LFP chemistry, which reduces reliance on cobalt and nickel.
•Long-term supply contracts and strategic hedging.
•Continuous manufacturing and efficiency improvements.
This adaptability underscores the maturity of the battery supply chain and its ability to navigate volatile raw material markets.
Stationary storage systems witnessed the most dramatic price drop, with average pack prices falling 45% to $70/kWh. This makes energy storage the lowest-cost battery application segment for the first time.
Driven by massive production capacity in China—estimated at 557 GWh in 2025, more than double global installations—storage projects are now economically viable for a wide range of applications:
•Grid-scale renewable integration.
•Commercial and industrial backup power.
•EV charging infrastructure support.
For the second consecutive year, average EV battery prices remained below the symbolic $100/kWh threshold. While the global average saw a modest 1% decline, significant regional disparities persist. With major Western automakers now introducing LFP-based entry-level EVs, further cost reductions are expected in coming years.
The battery industry is poised for continued evolution:
•Sodium-ion batteries begin commercial production, offering a low-cost alternative.
•Advanced anode and cathode materials enter pilot phases.
•Recycling and circular economy initiatives gain traction.
These innovations will further enhance supply chain stability and drive down costs.
Falling battery prices unlock new opportunities across sectors:
•Energy developers can deploy storage projects with shorter payback periods.
•EV manufacturers can target price-sensitive markets with affordable models.
•Commercial users can enhance energy resilience with cost-effective battery systems.
The relentless decline in battery prices is no longer just a trend—it’s a transformative force reshaping global energy and transportation systems. As technologies diversify and manufacturing scales up, the era of accessible, clean energy is accelerating.
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