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Jan 06, 2022
Multiple factors halt the downward trajectory of Li-ion battery costs, with higher prices for energy storage systems set to continue throughout 2022 and 2023
- Lithium-ion (Li-ion) battery prices have increased by 10-20% in the later months of 2021, impacted by a wide range of both global and industry-specific factors.
- Nonetheless, battery energy storage costs remain competitive with the alternative technologies. The bigger threat to growth is the ability of system integrators to procure the required volumes of batteries.
- We expect modest price declines in 2023 from the continued scale-up of LFP battery manufacturing. Global LFP capacity is predicted to continue rising. Announced expansion plans currently suggest that it will reach 330 GWh of annual capacity in 2025, compared with less than 200 GWh in 2020.
- We expect a group of specialized energy storage battery manufacturers is likely to emerge, and these tier 2 manufacturers will have sufficient capacity to serve the energy storage industry. This should help to alleviate supply constraints.
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This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.
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