E Source: Research shows that battery costs will soar 22% by 2026, and electric car prices may increase by $3,000

According to foreign media reports, a new report from Colorado research company E Source shows that the cost of producing electric vehicles will soar in the next four years due to a shortage of key raw materials for electric vehicle batteries. "The wave of battery demand is coming," said Sam Jaffe, vice president of battery solutions at E Source, "but I don't think the battery industry is ready yet."

In recent years, as global production of electric vehicle batteries has increased, the price of batteries has fallen. According to E Source estimates, the average price of batteries is currently $128/kWh, and it may fall to around $110/kWh by next year. But the decline in average battery prices will not last long. E Source estimates that battery prices will soar 22% between 2023 and 2026, reaching a maximum of $138/kWh, and then resume a steady downward trend by 2031, possibly as low as $90/kWh.

Jaffe said that because of the sharp increase in demand for key battery raw materials such as lithium, we expect battery prices to soar. "There is a real shortage of lithium now, and the shortage of lithium will become more severe. If you don't mine lithium, you can't make batteries." E Source predicts that the surge in battery costs could push up the price of each electric vehicle sold in 2026 by $1,500 to $3,000. The company also lowered its 2026 electric vehicle sales forecast by 5% to 10%.

According to the latest forecast by another automotive market consulting firm, annual sales of electric vehicles in the United States are expected to exceed 2 million by then. As more and more Americans accept electric vehicles, automakers are expected to launch more new electric models.

Although industry executives and government leaders agree that more needs to be done to obtain raw materials, E source said that the number of mining projects is still surprisingly small. E source wrote in a report, "With the price of lithium rising by nearly 900% in the past 18 months, we thought that the capital market would open the 'floodgates' and build dozens of new lithium mining projects. But the fact is the opposite, there is very little investment in mining projects, and most of the investment comes from China."

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