The average price of electric vehicle battery packs fell about 8% in 2025, continuing a long-run decline, according to the IEA's Global EV Outlook 2026. The drop widened an already large regional cost gap.
Chinese battery pack prices were roughly 30% lower than those in North America and about 35% lower than in Europe in 2025, a gap that has expanded from discounts of 20% and 25% respectively in 2022. LFP packs were more than 40% cheaper per kilowatt-hour than nickel-based (NMC) packs.
The IEA noted a new source of uncertainty early in 2026: lithium prices spiked to more than double their year-earlier level, which could push costs higher if sustained. In response, sodium-ion batteries have gained momentum as a lower-cost alternative.
The findings highlight how manufacturing scale and chemistry choices, rather than raw material prices alone, now drive the affordability of electric vehicles across regions.
