The automobile industry has been in a supply crisis since the COVID-19 pandemic. As a result, car manufacturers are forced to reduce production due to a shortage of chips and other components. As part of this, there has been a shortage of raw materials for Electric Vehicle (EV) batteries. Due to this, the production cost of the car is also increasing. According to a new report, EV battery consumption could increase by 22% by 2026. Sam Jaffe, Vice President of Battery Storage Solutions at E-Source, a Colorado-based research firm in the United States, said, “the demand for EV batteries was causing a tsunami. I don’t think the battery sector is ready to handle this extra demand.” So, the article is about EV battery Costs Could Spike 22% by 2026.
EV battery cell prices have been declining for several years due to increased production worldwide. At present, the cost of a battery cell is $128 per kilowatt-hour. Next year, the cost could drop to 110-kilowatt hours. However, this declining trend will not be permanent. According to e-source forecasts, the price of EV batteries will go up from now on. From 2023 to 2026, the battery cell price will increase by 22 percent. As a result, battery costs will rise to 138 per kilowatt-hour in the next four years. After that, by 2031, this expenditure is likely to decrease. After that, the cost is expected to drop to $90 per kilowatt-hour.
E-source predicts that the expected increase in battery consumption could push the price of each EV sold in 2026 from $1,500 to $3,000. As a result, the research firm estimates that car sales will fall by 5 to 10 percent due to rising prices. However, according to the latest forecast from consulting firm LMC Automotive, EV sales in the United States will exceed 2 million units annually by 2028. During this time, car manufacturers will bring dozens of models to market because every company focuses on producing electric cars.
Car executives have also warned of increasing the supply of materials needed for EVs. Last month, CEO of Ford, Jim Farley unveiled the company’s electric F-150 model and called for increased excavation. Earlier, Chief Executive of Tesla, Elon Musk, also called for an increase in nickel production. “If you dig nickel efficiently and environmentally sensitively, Tesla will give you a great deal for a long time,” he said.
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