Battery Replacement Costs Are Poised To Plunge: 'Cheaper Than Fixing An Engine'
Battery Replacement Costs Are Poised To Plunge: 'Cheaper Than Fixing An Engine'
Posted on November 26, 2024
The prospect of replacing an EV battery has long been a concern for electric vehicle owners, especially those purchasing used models. However, recent advancements in battery technology and falling lithium prices are set to make EV ownership even more cost-effective. A report from battery health start-up Recurrent sheds light on how these trends will reshape the economics of EV maintenance and second-life battery usage.
Currently, most EV batteries are designed to last significantly longer than their warranties, which typically cover eight years or 100,000 miles. Recurrent points out that many modern batteries can exceed 200,000 miles with minimal degradation, with some Tesla owners reporting ranges of over 300,000 miles on a single pack. While battery replacements are rare, those who do need one may find the costs becoming surprisingly manageable in the near future.
Projections suggest that battery pack prices could drop to $50 USD per kWh by the end of the decade, thanks to falling lithium prices and improvements in battery manufacturing. This means replacing a 100 kWh battery—common in larger EVs—could cost just $5,000 USD, making it comparable to replacing a traditional internal combustion engine. For smaller battery packs, such as a 75 kWh unit, replacement costs could dip as low as $3,375 USD. These advancements position EVs to reach price parity with gas-powered vehicles sooner than expected.
Additionally, the growing market for refurbished and repurposed batteries offers further cost-saving opportunities. Used EV batteries can be sold for energy storage or backup power applications, potentially offsetting the price of a new pack by $10–20 USD per kWh. As lithium prices are projected to halve by 2026, experts predict that EVs will reach cost parity with gas cars on an unsubsidized basis, making electric vehicles an even more attractive choice for consumers. With advancements in technology and the potential for a strong resale market for used batteries, EV ownership is becoming increasingly practical and affordable.