The latest analysis by IDTechEx reports that average lithium-ion cell prices have fallen from US$168/kWh in 2022 to just over US$100/kWh in 2025. By 2036, cell prices could approach US$50/kWh based on projected material cost trends and observed minimum cell pricing.
Two chemistries continue to dominate electric vehicle (EV) and energy storage applications: lithium nickel manganese cobalt oxide (NMC) and lithium iron phosphate (LFP). NMC offers higher energy density at greater material cost, while LFP provides lower cost and improved thermal stability.
Cell material cost breakdown by component. NMC 811 cell material costs < US$40/kWh and LFP < US$35/kWh in 2025. (Image: IDTechEx)
Over the past few years, a notable shift from NMC to LFP has occurred across China, with adoption expanding in Europe and North America.
Cathode materials remain the primary cost driver for lithium-ion cells. For NMC, costs are largely influenced by nickel, lithium, and cobalt. Following lithium price spikes in 2022, cathode material prices rose sharply but have since declined. As of 2025, NMC 811 material costs are estimated below US$40/kWh and LFP below US$35/kWh.
IDTechEx also highlights increasing use of higher-nickel NMC compositions such as NMC 9.5.5, which reduce cobalt intensity and cost exposure. Lithium remains a significant cost component, accounting for 84% of cathode material cost in LFP and 36% in NMC 811. This makes lithium price stability a critical factor in future battery affordability.
Cell costs differ by application: LFP cells used in stationary energy storage are significantly less expensive per kWh than those for consumer electronics, which rely on smaller cells and higher-cost materials.
The findings underscore how material trends, chemistry selection, and supply chain factors will continue to influence EV battery cost trajectories through the next decade.
Filed Under: Batteries, Technology News