How Much Does an Electric Car Battery Cost?

The out-of-pocket cost to replace an electric car battery varies significantly based on different factors, like your vehicle make and model, and whether the EV battery is still under warranty. In general, the price of an EV battery no longer under warranty can run anywhere from $2,500 to more than $20,000.

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Along with the cost of the battery itself, you&#;ll need to pay for installation. For most people, this isn&#;t a do-it-yourself project, because replacing an EV battery requires special training. Depending on your EV make and model, the cost of labor to remove the old battery and install a new one could increase your total cost of battery replacement by several hundred or even several thousand dollars.

If you&#;re contemplating whether to buy an EV but hesitate due to stories about the high cost of replacement batteries, here&#;s some information that may help.

The chances of needing to buy an EV battery are low

Decades of performance data is available for gas-powered vehicles, but that isn&#;t the case for electric vehicles. But, with more than 3 million new and used EVs now registered in the U.S., information is becoming clearer and indicating that few original owners have to replace their EV battery.

According to Recurrent, a company that tracks and reports information about used EV batteries, about 225 (1.5%) of batteries in a study group of around 15,000 plug-in electric vehicles needed to be replaced due to failure. This percentage doesn&#;t include batteries replaced due to recalls.

Of the replacements that do occur, most happen while the battery is still under warranty. EVs commonly come with a battery warranty of 8 years or 100,000 miles, but some automakers offer longer warranties up to 10 years or 175,000 miles. EV batteries do degrade over time, and factors like heat and rapid charging affect how fast that happens, but the current lifespan of EV batteries is now at 10 to 20 years.

Finally, if your EV battery needs to be repaired or replaced for reasons other than mechanical failure &#; for example a collision or fire &#; electric car insurance may help cover the cost depending on your carrier and policy.

Why do EV batteries cost so much?

The construction of EV batteries is complex. Most of today&#;s EVs use lithium-ion batteries, which are made up of rechargeable cells enclosed in modules that are housed within what&#;s called a battery pack. The cells use chemical compounds to store and deliver energy, and these compounds are made from expensive metals like nickel, cobalt, lithium and manganese.

Battery replacement costs are directly related to the make and model of the EV. Less expensive EVs tend to have smaller batteries that cost less to replace, while luxury or long-range EVs have larger batteries that require more metals to produce and cost more to replace.

Are there low-cost options for replacing an EV battery?

You may be able to find cheaper options for replacing an EV battery, but currently alternatives aren&#;t plentiful.

Refurbished EV batteries: Remanufactured or refurbished batteries may be a less-expensive option than buying a battery through a dealership or mechanic. There are third-party companies that specialize in EV battery refurbishing, but you won&#;t find a lot of them. Also, most are fairly new and don&#;t have a long track record.

Used EV batteries: You can find used EV batteries for sale, but it&#;s difficult to determine a battery&#;s remaining capacity or condition, and diagnostic testing for the general public isn&#;t easy to find. Also, most EV batteries are still being used in the original car, so you may have trouble finding a used battery for your particular make and model. The shortage of secondhand EV batteries is actually driving up their cost.

Repairing EV batteries: Some EV batteries can be repaired, for example replacing a bad cell, but it depends on the car. Batteries in some EVs are impossible to repair. If repair is an option, it should be done by a highly trained professional and can come with a hefty price tag of thousands of dollars.

The future cost of EV batteries

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We are in the midst of a year-long acceleration in the decline of battery cell prices, a trend that is reminiscent of recent solar cell price reductions.

Since last summer, lithium battery cell pricing has plummeted by approximately 50%, according to Contemporary Amperex Technology Co. Limited (CATL), the world&#;s largest battery manufacturer. In early summer , publicly available prices ranged from 0.8 to 0.9 RMB/Wh ($0.11 to $0.13 USD/Wh), or about $110 to 130/kWh.

Pricing initially fell by about a third by the end of summer . Now, as reported by CnEVPost, large EV battery buyers are acquiring cells at 0.4 RMB/Wh, representing a price decline of 50%to 56%. Leapmotor&#;s CEO, Cao Li, expects further reductions, with prices potentially dropping to 0.32 RMB/Wh this summer, marking a decrease of 60% to 64% in a single year.

EnergyTrend observed that energy storage battery cells are priced similarly to electric vehicle battery cells.

Additionally, CnEVPost reports that the battery cells being sold come equipped with advanced technologies, including faster charge rates, higher cycle life, improved temperature management characteristics, and higher energy density packaging.

A February report from Goldman Sachs attributes the accelerated price declines partly to a slight slowdown in electric vehicle adoption, leading to lower commodity prices. The finance group revised its global battery demand growth projection to 29% for , down from the previous estimate of 35%, with a 31% growth expected in .

Goldman also forecasts a 40% reduction in battery pack prices over and , followed by a continued decline to reach a total 50% reduction by -. Goldman predicts that these price reductions will make electric vehicles as affordable as gasoline-powered vehicles, leading to increased demand.

One of the most notable commodity price declines related to EVs is that of lithium hydroxide. Its price surged from late through , then began to tumble in early , and continues to decrease today.

The price decreases are attributed to several factors, including a perception of stabilizing demand as manufacturers struggle to make EVs profitable, which has led to a softening of speculative investment in vehicle metal futures markets. Other contributing factors include supply chain improvements, decreasing inflation, and new lithium supplies coming online.

Other metals, such as copper, have fallen from pandemic-era highs but have not returned to pre- prices.

Interestingly, both batteries and solar panels have seen their prices drop by about 90% since , with both products currently experiencing accelerated price declines. The Rocky Mountain Institute&#;s December report, &#;X-Change: Batteries &#; The Battery Domino Effect,&#; presents a chart mirroring the trends seen in solar panels over the last fourteen years.

Looking back thirty or forty years, the costs of both batteries and solar panels have decreased by 99% or more for their base units.

Driven by these price declines, grid-tied energy storage deployment has seen robust growth over the past decade, a trend that is expected to continue into .  The U.S. is projected to nearly double its deployed battery capacity by adding more than 14 GW of hardware this year alone. China is anticipated to become the grid storage leader, with deployments of just over 24 GW of capacity expected. EnergyTrend forecasts a global deployment of 71 GW of capacity, representing a 46% expansion over the 177% growth seen in .

There is abundant anecdotal evidence from public and private sources corroborating these price declines in the marketplace. A significant example is the drop in electric vehicle prices over the past year, so substantial that Hertz had to publicly adjust the value of its Tesla fleet due to falling resale values. pv magazine USA has spoken with multiple energy storage vendors who have reported significant reductions in pricing, though one noted that while cell pricing has fallen significantly, the broader balance of system surrounding the battery cells has not fallen as quickly.

One vendor mentioned that advancements in battery cell technology, leading to increased energy densities, have contributed to lower deployed system costs per kWh.

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