Global average battery prices fell 6% between 2020 and 2021, but they might be on the rise going forward, according to Bloomberg New Energy Finance’s (BNEF) annual battery price survey.

Lithium-ion battery pack prices averaged $132 per kwh in 2021—down from $140 per kwh in 2020—and $101 per kwh on a cell basis, the report said.

However, higher raw material prices are already pushing prices back up, according to the report, which predicted a $135 kwh average pack price for 2022. That could mean the point when prices drop below $100 per kwh—generally considered a crucial milestone for EV affordability—is delayed by two years, BNEF said.

Battery production at Mercedes-Benz's plant in Hedelfingen, Germany

Battery production at Mercedes-Benz’s plant in Hedelfingen, Germany

BNEF predicts average pack prices will dip below $100 per kwh in 2024, allowing automakers to produce electric cars that achieve price parity with gasoline vehicles. Cost remains the biggest barrier for EV adoption, a 2020 study found.

This isn’t the first report to cite issues sourcing raw materials as a potential harbinger of higher battery prices. Other reports have singled out nickel as being on the verge of a shortage—and not all batteries need that.

However, BNEF found that supply-chain issues have even driven up raw material prices for the lower-cost lithium iron phosphate (LFP) chemistry currently favored by several large Chinese automakers and battery suppliers, and gradually being adopted by Tesla. Since September, Chinese LFP cell producers have raised their prices 10% to 20%, the report said.

Volume-weight average battery pack and cell prices 2013-2021 (from BNEF report)

Volume-weight average battery pack and cell prices 2013-2021 (from BNEF report)

If these predictions come true, next year could break a streak of good news that has helped cut costs rapidly. BNEF reported price decreases in 2020 and 2019 as well, and the industry has made major strides over the past decade. Pack prices averaged $1,200 per kwh in 2010, so the 2021 average represents an 89% reduction in just over a decade, BNEF noted.

A battery price increase could push out targets like the $60 per kwh the United States Department of Energy sees as a break-even point for EVs versus internal combustion.

Automakers have ambitious targets of their own, like Toyota’s goal to cut EV costs in half in 10 years. So do entire states and nations. If batteries become more expensive for a year or two, will it push targets back? As a new factor in this complex EV-adoption trendline, that remains to be seen.