In recent years, the electric car (EV) market has experienced a spectacular rise, driven by a combination of economic, environmental and political factors. Growing awareness of the need to reduce greenhouse gas emissions has pushed governments around the world to introduce policies that promote the adoption of EVs, such as tax incentives, subsidies and restrictions on thermal vehicles. At the same time, car manufacturers have intensified their efforts to develop ever more efficient and accessible models, thus expanding their range and attracting a more diverse audience.
Technological advances, particularly in the field of batteries, have improved range, reduced production costs and made electric cars more attractive to consumers. The growth of charging infrastructure, although still uneven depending on the region, also contributes to facilitating the adoption of these vehicles. However, it is a recent forecast that could change the situation more quickly than expected.
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Electric cars: battery costs must fall
The reason: according to forecasts from Goldman Sachs Research, they should be “lower than expected” in the coming years. According to this study, the average price of batteries worldwide has already fallen from 153 US dollars per kilowatt hour in 2022 to 149 US dollars in 2023. By 2026, it is even expected to drop to 80 US dollars. This would correspond to a drop of almost 50% since 2023.
Nikhil Bhandari, co-head of natural resources and clean energy for the Asia-Pacific region at Goldman Sachs Research, explains that the drop in battery prices has two driving causes. One is technological innovation. Thus, more and more new battery products would be brought to market, with about 30 percent higher energy density and lower cost. The second driver would be a continued decline in the price of battery metals.
The unexpected forecast for the next two years
A recent forecast indicates that the electric car market could see a massive acceleration in the next two years, far beyond initial expectations. Some experts estimate that EV market share could double or even triple within two years, driven by a combination of key factors such as continued declines in battery costs, strengthened government incentives and a shift in consumer preferences.
This dynamic is supported by the commitment of major automobile manufacturers who are investing massively in research and development, with the aim of electrifying their entire range. The development of new, more efficient and less expensive battery technologies, as well as the expansion of charging infrastructure, play a decisive role. Consumers, increasingly sensitive to environmental issues, are also more inclined to adopt electric mobility solutions, which fuels this strong growth forecast.
However, this expected upheaval raises questions. What will be the real impacts for consumers and manufacturers? How will infrastructure and demand for raw materials respond to this acceleration? The next two years could well be decisive in shaping the future of electric mobility.