By 2030, Replacing an EV Battery Could Be Cheaper Than Fixing a Gas Engine

The days of worrying about exorbitant EV battery replacement costs may be coming to an end. 

Recent reports from industry leaders like Recurrent and Goldman Sachs highlight an accelerating drop in lithium-ion battery prices, promising a future where replacing an electric vehicle (EV) battery is as affordable—or even cheaper—than fixing a traditional internal combustion engine.

Plummeting Battery Prices

Goldman Sachs predicts that by 2026, lithium-ion battery prices could reach $80/kWh, nearly 50% less than their cost in 2023. By 2030, estimates range between $50-$64/kWh for battery packs, meaning a 100 kWh replacement pack could cost between $4,500 and $5,000—on par with the cost of replacing a gas engine. As Recurrent explains, “battery replacement costs are poised to be cheaper than fixing an engine by 2030.”

The price decline is driven by:

• Cheaper Chemistries: Batteries with lithium iron phosphate (LFP) chemistries are less expensive and more widely available.
• Higher Energy Densities: Technological advancements are packing more power into smaller and cheaper batteries.
• Recycling Materials: Reusing lithium and cobalt reduces reliance on mining, lowering production costs significantly.
• Longer Lifespan, Lower Costs

Today’s EV batteries already last far longer than most owners expect. Manufacturers typically offer warranties of 8 years or 100,000 miles, but many EVs, like Tesla’s Model S, have driven over 200,000 miles with minimal degradation. Some estimates suggest modern lithium-ion batteries could last well beyond 300,000 miles. Battery replacements remain rare, and even when necessary, falling costs make the process less daunting.

A Booming Second-Life Market

Another game-changing factor is the growing second-life battery market. Used EV batteries, though no longer ideal for vehicles, are increasingly valuable for energy storage, backup power, and other applications. By 2030, owners may be able to sell their used battery packs to offset replacement costs by $10-$20 per kWh. Recurrent projects that this could make replacement packs even more affordable, encouraging the resale of older EVs rather than scrapping them.

EVs Nearing Gas-Car Price Parity

These trends go hand-in-hand with EVs becoming more affordable overall. Goldman Sachs predicts battery-powered vehicles (BEVs) will reach ownership cost parity with gas-powered cars by 2026—even without government subsidies. This makes EVs a more attractive option for buyers across the board, including those in the used-car market.

As Liz Najman from Recurrent puts it, “The threat of a battery replacement should no longer scare off potential EV owners.” Advancing technology and falling battery costs are not only making EV ownership more accessible but also increasing the longevity and resale value of used models.