Stationary Storage Leads Price Drop as Li-Ion Packs Fall 8%: BNEF Report

Lithium-ion battery pack prices have dropped 8% since 2024 to a record low of $108 per kilowatt-hour, according to the latest analysis by BloombergNEF (BNEF). The report attributes this drop to continued cell manufacturing overcapacity, intense competition, and the ongoing shift to lower-cost lithium iron phosphate (LFP) batteries. According to BNEF’s 2025 Lithium-Ion Battery Price Survey, these factors drove down pack prices despite an increase in battery metal costs.

The report identified rising risks from new cobalt export quotas in the Democratic Republic of Congo, as well as supply risks from certain Chinese lithium assets. These factors could have led to higher metal prices in 2025, but surprisingly, they did not translate into higher annual prices for cells or packs.

Supply Risk Causes Spike in Battery Metal Prices 

The study noted that the industry absorbed shocks like cobalt export quotas or other metal price rises  through greater LFP adoption, long-term contracts, and broader hedging strategies.

The report highlighted that China has consistently produced more cells than required for domestic electric vehicle and stationary storage demand, creating intense competition among manufacturers. The effect has been most pronounced in the stationary storage sector, where many suppliers can serve the same projects. This dominance has enabled China’s LFP producers to meet nearly all global demand.

Stationary Battery Pack Prices 45% Lower in 2025

Battery pack prices for stationary storage dropped to $70/kWh in 2025, 45% lower than in 2024. This is the sharpest drop across all segments, making stationary storage the lowest-priced segment for the first time.

Battery electric vehicle (BEV) packs were the cheapest in the transport segment at $99/kWh, marking the second year they remained below the $100/kWh threshold. Average LFP battery pack prices across all segments were $81/kWh, while nickel manganese cobalt (NMC) packs were $128/kWh.

Evelina Stoikou, head of BNEF’s battery technology team and lead author of the report, said: “Cut-throat 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.”

The report also covers regional differences in pricing. Average battery pack prices were lowest in China at $84/kWh. Pack prices in North America and Europe were 44% and 56% higher, respectively, reflecting higher local production costs and greater dependence on imported batteries, which typically carry a premium compared with Chinese prices.

Europe Sees 8% Drop in Battery Pack Prices

BNEF found that China saw the largest drop in pack prices, down 13% in real terms from 2024, while North America and Europe saw declines of 4% and 8%, respectively. The larger drop in Europe compared with North America was attributed to the changing policy and tariff environment in the US.

Additionally, many Chinese companies redirected exports to European markets, adopting more aggressive pricing strategies to maintain global sales volumes and meet annual targets. BNEF noted that this shift intensified price competition in Europe.

It expects pack prices to decrease again in 2026, as raw material prices face upward pressure but adoption of low-cost LFP continues to expand. Over the longer term, ongoing investment in R&D, manufacturing efficiency, and supply chain expansion is expected to support further technological improvements and cost reductions.

The report has also identified emerging technologies—including silicon and lithium metal anodes, solid-state electrolytes, new cathode materials, and new cell manufacturing processes—as key drivers for the next wave of price declines.

Implications for India 

The implications for India are significant, as most of the BESS tenders bid out in 2025 come up for execution and ordering from 2026 onwards. Fresh tenders have also seen bids that seem to assume lower costs, although the provennance of some suppliers in many cases might be doubtful. With domestic battery cell industrry only expoected to scale up meaningfully by 2028 and beyond, it remains to be seen if a widely expected  ALMM style regulation for domestic cell packs by 2026 end or 2027 leads to a rise in bid prices in due course.