How much does it cost to replace the batteries in electric vehicles?

The current level of global warming demands a shift from diesel and gasoline powered vehicles to a more sustainable resource. As the reality of climate change becomes more evident, societies are being compelled to invest in resources that better drive the idea of sustainability.

Electric vehicles (EV) are without a doubt a key catalyst to this shift and no wonder we encourage readers to ask as many questions as they can about electric vehicles charging, storage battery and whatever else they want to learn about EV.

Today’s Reader asked about the cost of replacing a battery in an EV:

I have a question regarding the cost of replacing the battery in a Battery Electric Vehicle (BEV) in Australia, and the manufacturer-recommended life before battery replacement becomes necessary? This subject is an important consideration for lots of buyers and a real concern before purchasing a BEV.

Regards, Jayson

Hi Jayson, most definitely, the question of when to replace the battery of a BEV, and its ultimate cost is crucial – and not just for potential BEV buyers but for the general public as well.

First up: I’ll split the question into two segments.

  • What are the chances that the battery will need replacement during the life of the EV?
  • What is the overall cost of a possible battery replacement?

Will you need to replace the battery during the life of your car?

To effectively answer this question, we’ll explore two issues:

  1. When will the EV battery be no longer ‘fit for purpose’?
  2. What’s the real ‘life of a car’?

First and foremost, a good number of manufacturers give guarantee on EV batteries for at least 70% capacity remaining after a period of 8 years. For example, a Hyundai Kona featuring 450- 500km range in town can translate to a minimum range of 315-350km at 8 years.

For majority of car owners, this would mean a charge twice weekly instead of once per week. The same is applicable for longer distance travel; just maybe with some recharge stops along the way between Brisbane and Sydney for instance.

TABLE 1: Current BEV Battery Warranties in Australia

It’s worthwhile to note that the battery won’t be in the ‘dead’ mode by the time it hits 8 years, though the driving range it delivers will have diminished.

Keep in mind that the smaller the battery packs, the higher the loss. For example, the original Nissan Leafs came with a real-world 120km range. Ideally, the 8 years warranty period could reduce to 84km and be disqualified for a warranty replacement.

As at now, the oldest Leafs in Australia are 11 years old and given the decline rate, the range might have fallen to 70km. (Or even lower during winter and/or when a heating and or air-conditioning systems are in use). That will obviously call for replacement if you use your car for more than a quick commute to your local shops.  

In contrast, while most original (2011-2014) Leafs actually declined at similar rates (or even worse), the latest EV batteries (complete with thermal management systems and enhanced battery chemistry) do not drop as fast—hence these range declines are only for worse case scenarios.

According to a 2019 survey by Geotab of the 6,000 electric vehicle owners that participated in the research, EVs lost on average 2.3% capacity every year while maintaining “high levels of sustained health” over extended periods of time.

“If the observed degradation rates are maintained, the vast majority of batteries will outlast the usable life of the vehicle” the study read in part.

Considering that this average included many early EVs, relying on online tools to differentiate models is a clear indication that modern ones are likely to exhibit significantly lower decline rates than average.

In concluding part (a): people purchasing the latest model EVs with larger-sized batteries will realise it will take them 10 years or more before they can consider replacing the battery.

Additionally, Electric Vehicles could be downgraded to second cars making local trips even as the earlier ICE car becomes obsolescent.

In case of day-to-day driving, it’s possible that the car’s warranty period will be 8 years or more (if ever) before a new battery is demanded.

What’s the real ‘life of a car’?

So, how long does it take before the suspension, electronics, steering or interior of a BEV gets ‘worn out’ and the car is considered to have reached the end of its usable life?

Considering that the average age of Australia’s car fleet is 10.6 years according to the 2020-2021 Australian Bureau of Statistics, then 20 years sounds like a realistic guess that could explain why 2030 might just be the last date for banning purchase of new ICE cars if Australia is committed to reaching its goal of zero emissions by 2050.

Therefore, the answer to question (a) above is that:

  • an Electric Vehicle may never require a battery replacement in its life; and
  • if it does, it won’t be more than one battery replacement during its life; and
  • if replacement is necessary, the earliest it will be required is at 10 years or later.

What is the overall cost of a possible battery replacement?

Previously when the Nissan Leaf was introduced into the market, horrific stories of rapid battery declines were commonplace with the cost of battery replacement being around $30,000.

With time, it was discovered that these were unnecessary worries. In fact, batteries that diminished faster than expected were replaced for free before the expiry of the 8-year warranty.

Since the 8-year warranties have ended, the cost of replacing a battery by an authorised dealer has reduced to about $10,000 for a 24kWh battery.

And given that failed battery packs have been returned to manufacturers, it was discovered that the packs only had few faulty cells while the rest were fine.

Consequently, for countries making higher early Leaf sales, battery recycle schemes are disassembling and repackaging cells into remanufactured battery packs with guarantee.

For example, Japan is currently rebuilding packs for AZEO or ZE0 Leaf sold for about US$2900 (approximately Au$4000).

Furthermore, when vehicles are no longer fit to be on the road after accidents—second hand batteries become readily available to private businesses that use them for experiment. Consequently, there’s already an aftermarket replacement for battery packs.

On the other hand, the main cost element of a BEV—the battery has rapidly been declining in prices just like solar panels dipped in the early 2000s. In 2010, the prices of EV batteries shot to about US$1100 per kWh, but are currently sitting at US$137.

In 2010, EV battery prices were up around US$1100 per kWh but have since plunged to US$137/kWh as per the graph below. (Figures in US dollars).

According to forecasts, the most significant number of ICE and BEV price equality is US$100 kWh, with 2024 being the possible date when it will begin.

The Author

I took an interest in the Australian energy sector close to ten years ago and since then have monitored the trends, technologies and direction of the Australian Energy Market. I was drawn to the Australian solar market in 2008 and since then have worked heavily in the field. I am partnered with national and international solar energy companies, from manufacturers of solar panel and inverter technology, online software developers that introduce tools to quote, monitor and manage solar power systems and media organisations who like myself, closely monitor the solar and renewable energy sector.