The estimated increase in prices is due to higher demand for essential uncooked supplies, like lithium. Lithium is a valuable component of high energy rechargeable batteries thanks to its high electrochemical potential.
In the last few years, there has been a decline in the price of EV battery cells because production of electric vehicles spiked around the world. But now, Sam Jaffe, VP of battery solutions at research firm E Source in Colorado, says that “The tsunami of demand is coming. I don’t think the battery industry is ready for it.”
Dozens of electric models are expected to be introduced to the market in the next years, as more and more people are warming to the idea of going electric. However, we should be willing to open our pockets wider, as this potential surge in battery costs would add anywhere between $1,500 and $3,000 to the price of EVs sold in 2026.
Executives in the automotive world, like Ford CEO Jim Farley and Tesla’s Elon Musk, have urged the mining industry to increase their extractions to source raw materials.
“We need a license to mine. We need a license to process precursors and refine in the United States, and we need the government and the private sector to work together and bring them here,” Farley is cited as saying.
The E Source report also altered its electric vehicle sales projections for 2026, reducing the estimations by 5% to 10%.