Big Board Alerts

September 24, 2023
How much is an electric car battery?

Electric cars are supposed to supplant internal combustion-powered vehicles over the next 10–20 years. And while the sales of electric cars are growing, they remain a small fraction of the U.S. market due to their higher costs and limited charging stations.

These problems should be resolved over the next few years, with likely breakthroughs in battery technology to reduce the average cost of electric vehicle batteries. Combine that with a nationwide expansion of fast-charging stations, along with lower costs for electric motors as automakers ramp up production, and electric vehicles could reach price parity with – and maybe even cost less than – traditional cars, while becoming just as convenient to “refill”.

That’s the future many envision, but for now, EV battery packs remain the single most expensive part of an electric car. Thankfully, all-electric car batteries are covered by an eight-year, 100,000-mile warranty, so if a new or moderately used EV needs a new battery it’s possible, even likely, to be replaced for free. Better still, battery degradation is rare in modern EVs, with most of them retaining 90-plus percent of their battery capacity for a decade or more. However, despite their impressive life span, every EV battery will eventually fail. And if it’s out of warranty, the electric car battery replacement cost will be paid by the owner. So let’s dive into electric car battery costs.

Plug-in hybrid cars, including the BMW i3, Chevy Volt, Hyundai Ioniq, and Toyota Prius Prime, have relatively small battery packs, typically between 10 and 20 kilowatt-hours. Looking at the automotive repair site Repair Pal shows the cost of battery replacement for these hybrids between $9,000 and $11,000, including labor costs.

As expected, full electric cars like the Chevy Bolt, Nissan Leaf, and Tesla Model 3, use substantially larger batteries, with substantially larger electric car battery costs. For the Chevrolet Bolt’s 60 kWh battery, that cost is between $17,000 and $19,000, including labor. The latest Nissan Leaf’s battery is smaller than the Bolt’s, and a bit cheaper, at around $16,000. A replacement Tesla battery for the Model 3, which at 75 kWh is larger than the Bolt or Leaf, is more difficult to ascertain. Tesla doesn’t use conventional dealerships, and it tends to restrict everything related to vehicle pricing, including the cost of parts and labor. Looking at various internet sources suggests a Model 3 battery costs between $15,000 and $18,000.

It’s important to remember that battery costs will vary based on everything from where an electric car is located to what is happening in the global geopolitical world. A year ago, before the war in Ukraine, the lithium-ion batteries that power modern electric vehicles were much cheaper. But the cost of lithium skyrocketed after the war began, making formerly profitable models, like the Mustang Mach-E, a money-losing proposition for Ford. A similar price hike occurred with nickel and palladium, two other key components in EV battery production.

This increase in raw material costs has been reflected in recent price hikes for electric vehicles, reducing their affordability for mainstream consumers. This is the challenge the automotive industry must overcome if it wants to realize the sustainability and zero-emission benefits of electric vehicles. A breakthrough in battery technology could move solid-state batteries from theory to reality, reducing their costs, extending EV battery life, and increasing the speed of EV charging. But until such breakthroughs occur, the high cost of producing and replacing electric car batteries will remain a barrier to entry for many mainstream consumers considering an EV.


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