Battery pack prices will fall to $105 per kilowatt-hour next year as Chinese overcapacity and LFP adoption continue driving costs down.

Why it matters: Cheaper batteries make EVs more affordable and accelerate grid-scale energy storage deployment worldwide.

The Details

A new BloombergNEF survey forecasts the average battery pack price will drop 3% to $105/kWh in 2026.
The decline follows 2025’s 8% drop to $108/kWh, which came despite rising battery metal costs and cobalt export restrictions from the Democratic Republic of Congo.
Falling prices stem from a glut of manufacturing capacity in China, intensifying competition, and the industry’s shift to cheaper lithium iron phosphate (LFP) technology.
China’s annual EV sales are now set to outpace all vehicle sales in the United States, including internal combustion models.
BNEF projects global energy storage installations will more than double over the next decade as battery costs continue declining.

By the Numbers

2026 forecast price: $105/kWh
2025 actual price: $108/kWh
2025 price drop: 8% year-over-year
2026 expected drop: 3% year-over-year
2010 starting point: Approximately $1,500/kWh
Total decline since 2010: Over 93%

What They’re Saying

“Cutthroat competition is making batteries cheaper every year. This is an important moment for the industry, as record-low battery prices create an opportunity to lower EV costs and accelerate the deployment of grid-scale storage to support renewables integration around the world.” – Evelina Stoikou, head of the battery technology team at BNEF

EVXL’s Take

The slower price decline tells the real story. After years of dramatic drops, battery prices are approaching a floor where further cuts require fundamental technology shifts rather than manufacturing scale. The 3% forecast versus 2025’s 8% decline signals that easy gains from Chinese overcapacity are running out.

This connects directly to what we’ve been tracking in China’s brutal EV consolidation, where only 15 of 129 brands are expected to survive to 2030. The same overcapacity crushing automaker margins is also suppressing battery prices. BNEF’s mention of silicon anodes, solid-state electrolytes, and new cathode materials hints at where the next cost breakthroughs will come from, but those technologies remain years away from mass production.

Frequently Asked Questions

How much will EV battery prices drop in 2026?
BloombergNEF forecasts a 3% decline to $105 per kilowatt-hour, a smaller drop than 2025’s 8% decrease.

What is driving battery price declines?
Excess manufacturing capacity in China, increased competition among battery makers, and the shift to cheaper lithium iron phosphate (LFP) chemistry.

How much have battery prices fallen since 2010?
Prices have dropped over 93%, from approximately $1,500/kWh in 2010 to $108/kWh in 2025.