How Much Does It Cost to Replace an EV Battery?
Are you one of the many EV hopefuls eyeing the great bargains in the used market? Are you trying to save $4,000 on a used electric car while you still can? Are fears about costly battery replacements holding you back?
Worry no more. Battery replacements outside of warranty, which happen less than 1 percent of the time in cars from 2016 and later – won’t be expensive for much longer. In fact, as lithium-ion battery prices fall to all time lows, EV batteries may soon be cheaper than fixing the engine of a gasoline car.
EV Battery Prices Hit New Lows – That’s Great News
According to an October report by Goldman Sachs, 2026 battery prices might be as low as $80 per kWh, or about half of the kilowatt-hour price from 2023. This is an incredible savings in just three years. Goldman Sachs points out that with these sorts of battery prices, the price for a new EV should soon be around the same as the cost for a new gas car.
But, the good news is not just that new EVs will be the same price as new gas cars. Most Americans never buy new cars. And, for those of us excited about the prospect of a clean, affordable, convenient ride, this means used EVs.
The truth is that battery replacements on EVs are very rare, and are generally covered by manufacturers’ warranties that last or exceed 8 years or 100,000 miles. Still, the biggest concern about used EVs remains the fear of bad battery health.
Low-priced lithium ion batteries alleviate those fears, because it means that replacement batteries will finally be affordable. Soon enough, it will be cheaper to replace a battery pack than it would be to replace a combustion engine.
The other nice thing about used EVs? Electric cars have far fewer moving parts than gas cars, which means that a lot of the odometer-related repairs you can expect with an ICE car are not issues for EVs.
The Future of EV Battery Prices and Affordability
Goldman Sachs' October 2024 report projects that the cost of battery packs will drop to $64 per kWh by 2030. While this estimate is higher than others, it highlights the ongoing decline in prices. For comparison, in January 2024, industry leader RMI estimated 2030 cell prices at $32 to $54 per kWh, translating to $45 to $64 per kWhfor complete battery packs.
Meanwhile, real-world data shows prices are dropping even faster overseas. This year, industry giant CATL began offering LFP (lithium-iron-phosphate) cells at $56 per kWh, with BYD, one of the largest manufacturers in China, quickly following suit. This summer, Clean Energy Associates predicted that the global lithium-ion battery market will remain oversupplied through 2028, suggesting prices might fall even further.
Why Are Battery Prices Falling?
The rapid decline in battery pack prices is driven by advancements in three key areas, as highlighted by RMI:
- Cheaper chemistries: The adoption of cost-effective materials like LFP (lithium iron phosphate) reduces costs without sacrificing performance.
- Higher energy density: Improved battery designs pack more energy into smaller, lighter, and cheaper units.
- Recycling and reuse: Recovering materials from used batteries offers a much more affordable alternative to mining raw resources.
The Goldman Sachs report adds another crucial factor: declining battery metal prices. Lithium, cobalt, and other metals account for nearly 60 percent of battery costs, and over 40 percent of recent price reductions can be attributed to lower commodity prices. After a period of "green inflation" from 2020 to 2023, costs have stabilized, further easing pressure on battery manufacturers.
The Future of EV Battery Replacements
Daan Walter, industry insider and author of RMI’s battery report, says that $35 per kWh for EV battery cells is achievable by 2030. This would put pack prices under $50 per kWh, meaning replacement costs for a large 100-kWh pack might be $4,500 to $5,000, while a more typical 75-kWh pack could cost around $3,375. For context, that’s comparable to replacing a car engine!
Walter also mentioned that, by 2030, consumers could offset battery replacement costs by selling their old packs in the growing second-life market. Today, EV service shops typically keep the old battery packs – refurbishing them for resale, or selling them for reuse. However, with an aging wave of EV batteries and increased demand for energy storage and backup power, owners may soon negotiate to sell their packs directly. Depending on factors like chemistry and quality, this could reduce replacement costs by $10 to $20 per kWh.
Conclusion: Extending the Lifespan of Inexpensive EVs
The takeaway? By 2030, owning a 10+ year-old electric car will no longer mean facing an impractical replacement cost. Buying an inexpensive EV and replacing the battery for a few thousand dollars will become a viable option, extending the lifespan of these vehicles and boosting their resale value.
