Electric vehicle (EV) popularity is going up, and the cost is, thankfully, finally going down. Over the past year, the average cost of an EV has dropped almost 20%, which means that EV ownership is becoming more realistic for the average American.
Government incentives and federal and state tax credits contribute to this price decrease. And now, there’s a new factor that may significantly reduce the cost of EVs for good.
According to recent research by Benchmark Mineral Intelligence, the global weighted average price for lithium-ion cells has dipped below $100 per kilowatt-hour (kWh), making it the lowest cost in two years. In fact, since the beginning of 2023, the cost of lithium has more than halved. And it’s not just lithium that’s dropped in price; the cost of other essential materials like cobalt sulfate and nickel have also substantially dropped.
What Is Lithium?
Lithium, if you don’t know, is the raw material used for battery production. So, what do these significant price drops mean? According to Evan Hartlet, an analyst at Benchmark, these price cuts could give automakers the breathing room to offer EVs at comparable prices to gas-powered cars.
In a nutshell? We might all be able to afford EVs soon.
What's The Catch?
But there’s always a downside, right? The U.S. government provides tax rebates of up to $7,500, but to qualify for the total rebate, the EV battery must be made from materials sourced from the U.S. or specific partners, of which China is excluded.
Since this new lithium is sourced from China, if automakers choose to buy it, they may risk losing access to half of the U.S. tax credit, which could make the savings a wash. The selling price of the car may be less, but if consumers are losing half of the tax credit, how much is the consumer really saving?
So, will this lithium price decrease make a difference? Only time will tell.
Research journalist, Freelance writer, Managing Editor
- Expertise: automotive content, trending topics.
- Education: LeTourneau University, Bachelors of Science in Business Administration.
- Over 400 articles and short news pieces published across the web.
Experience: Madison Cates is a journalist located in the great state of Texas. She began writing over eight years ago. Her first major research piece was published by the Journal of Business and Economics in 2018. After growing up in a household of eight brothers and a dad who was always restoring old Camaros, she naturally pivoted her freelance career into the automotive industry. There, she found her passion.
Her experience paved the way for her to work with multiple large corporations in automotive news and trending topics. Now, she now finds her home at Wealth of Geeks where she proudly serves as Managing Editor of Autos. Madison is always down to geek out over the latest beautiful cars on the market, and she enjoys providing her readers with tips to make car ownership easier and more enjoyable.