According to a new analysis by BloombergNEF, the global average price for lithium-ion battery packs has dropped to a new record low of $108 per kWh in 2025, representing an 8% decline from 2024. This price reduction occurred despite an increase in the cost of raw battery metals. The drop is largely attributed to intense market competition, significant overcapacity in cell manufacturing, and a growing industry-wide adoption of more affordable lithium iron phosphate (LFP) battery chemistries. In a notable market shift, stationary storage systems have now become the lowest-priced battery segment.
The continued downward trend in battery prices has been sustained even as the costs for key metals like lithium and cobalt rose in 2025. The industry successfully absorbed these higher material costs through strategies such as long-term supply contracts, financial hedging, and, most significantly, the accelerated adoption of LFP technology. China’s manufacturing dominance played a crucial role, with its persistent oversupply of cells fueling fierce price competition globally. The nation’s leadership in LFP production has allowed it to meet nearly all international demand for this lower-cost alternative.
The BNEF survey, which covers applications from electric vehicles to stationary storage, revealed significant price variations across different sectors. For the first time, battery packs for stationary storage were the most affordable, with prices falling a remarkable 45% from 2024 to an average of just $70/kWh. In the transportation sector, packs for battery-electric vehicles averaged $99/kWh, staying below the critical $100/kWh benchmark for the second consecutive year. When comparing chemistries, LFP packs averaged $81/kWh across all uses, while nickel manganese cobalt (NMC) packs were considerably higher at $128/kWh.
Geographically, China leads with the lowest average battery pack prices at $84/kWh. In contrast, prices in North America and Europe were 44% and 56% higher, respectively, due to increased local production costs and a reliance on more expensive imported batteries. China also saw the most significant price reduction, with a 13% drop from 2024. European prices fell by 8%, while North American prices decreased by 4%. The more pronounced decline in Europe is linked to Chinese exporters redirecting shipments to the region and employing aggressive pricing to secure market share amid shifting U.S. trade policies.
Industry experts see this trend as a pivotal moment for the energy transition. Evelina Stoikou, lead author of the BNEF report, noted that the cut-throat competition is making batteries cheaper annually, which will help lower electric vehicle costs and speed up the deployment of grid-scale storage. Looking ahead, BNEF anticipates that prices will continue to fall in 2026 as LFP adoption expands. Long-term cost reductions are also expected from ongoing research and development, manufacturing improvements, and emerging technologies such as silicon anodes and solid-state electrolytes.