Replacing an EV battery becoming cheaper than fixing dead ICE?

By 2030, replacing an electric car’s battery might be cheaper and easier than replacing a dying classic combustion engine (ICE). At least, that’s what a new study of evolving battery prices by American startup Recurrent Motors Inc. shows.

Using data from global investment banking and asset management firm Goldman Sachs and climate research firm RMI, Recurrent estimates that cell prices could reach $35 (€33.3) per kWh by the end of the decade. Replacing a typical 75 kWh EV battery would cost some $3,375 (€3,219). By then, a 100 kWh pack would cost between  $4,500 and $5,000 (€4,700).

On par with ICE replacement

“That’s on par with an internal combustion engine replacement,” Recurrent says. According to figures from J.D. Power, replacement can cost between $4,000 (€3,800) for a four-cylinder unit and more than $10,000 (€9,500) for a high-performance one.

Recurrent bases its assumptions on projected battery material prices dropping significantly in the coming years. Goldman Sachs recently reported that by 2026, battery prices should reach $80/kWh, roughly 50% of the 2023 price.

But that price is still high, the Recurrent article says, pointing at others like industry leader RMI who estimated a 2030 cell price of $32–$54/kWh, or $45-$65/kWh for the pack. “However, throughout 2024, CATL began offering LFP cells as low as $56/kWh, and BYD followed.

“This summer, Clean Energy Associate predicted that the global market for lithium-ion batteries will remain oversupplied through 2028, meaning even lower than anticipated prices.”

Up to $20,000 today

The cost to replace a complete battery pack today varies significantly based on factors like the vehicle’s make and model and whether the EV battery is still under the typically 8-year or 150,000 km warranty. In general, the price to replace an EV battery no longer under warranty can run today anywhere from $5,000 to about $20,000 (€19,000).

But battery replacements on today’s EVs are rare. According to Recurrent, modern batteries can last twice as long and go double the distance, even in the most conservative estimate. Technology is improving fast.

Improving the battery’s lifespan

For instance, researchers from the SLAC-Stanford Battery Center, linked to Californian Stanford University, have found that using high currents for the first charging after the battery’s production can improve its lifespan by 50 to 70%.

It could be a significant breakthrough in battery manufacturing because it can reduce costs by saving valuable time, making batteries cheaper and lasting fully at least 12 to 15 years, compared to the eight years generally guaranteed now.

Giant Chinese battery cell producer CALB showed in 2023 a new battery with an impressive estimated lifecycle of 25 years, withstanding 15,000 complete charge cycles.

But even without that, today’s EV batteries last longer than initially guaranteed. Tesla owners frequently report driving over 200,000 miles (320,000 km) in their cars with minimal battery degradation. And even then, a battery is still functional enough for a second life as a stationary backup.

Reselling you old battery?

“In 2030, savvy consumers should be able to offset the cost of a replacement pack by reselling their battery in an increasingly competitive second-life market, “Recurrent says.

“An aging cohort of EV batteries, plus a growing market for second-life batteries, means that by 2030, customers may be able to negotiate the sale of their own packs, effectively lowering the price of a new one by $10-$20/kWh, depending on chemistry, configuration, and quality.

This leaves the question of how easy it will be to change a 250—to 500 kg battery. But battery swapping is already the USP of Chinese carmakers like NIO, which offer to rent instead of buy. They can swap your battery fully automatically in under three minutes. How difficult would that be?