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As the scale of lithium-ion battery factories continues to grow, the price of these essential components declines with it. Like computers and phones, lithium-ion batteries are a technology that benefits from the learning curve–the more you make of something, the cheaper it gets. In the Freeing Energy Project, we refer to this as economies of volume, to contrast it with traditional economies of scale that have been the primary mechanism to lower costs for every other type of electricity generation.
Over just ten years, the number of factories making lithium-ion batteries has skyrocketed. This increase in manufacturing capacity is one of the biggest reasons the cost of batteries for electric vehicles (EVs) has fallen almost ten-times over the same period.
The spreadsheet below contains the source data for this graph.