Global electric vehicle battery deployment jumped almost 30% in 2025 to 1.2 terawatt-hours, according to the International Energy Agency's Global EV Outlook 2026. EVs still accounted for more than 70% of that total, and light-duty vehicles took over 85% of EV battery deployment, but the fastest growth came from electric trucks, where battery demand more than doubled on the back of a surge in Chinese sales.
The IEA's headline finding is that batteries keep getting cheaper even as the market scales. Average battery pack prices fell 8% in 2025, supported by manufacturing efficiency gains, chemistry shifts, and intensifying competition. Bloomberg New Energy Finance data cited in the report put the average lithium-ion pack at a record-low $108 per kilowatt-hour, down 93% from 2010 levels. Packs for battery-electric cars came in at $99 per kWh, the second consecutive year below $100.
The caveat sits in the raw materials. Lithium prices at the start of 2026 were more than twice as high as in the same period in 2025, even though they remained around 70% below their 2022 peak. The IEA attributes the rise to faster-than-anticipated demand growth, particularly from battery energy storage, low inventories in China, and temporary supply disruptions including the suspension of CATL's Jianxiawo lithium mine. If those prices hold, they could push lithium-ion battery costs back up and reinforce momentum behind sodium-ion batteries, which contain no lithium.
Cobalt prices also doubled over the past year, driven by the Democratic Republic of the Congo's export ban announced in late February 2025 and converted into quotas from October 16, 2025. The DRC supplies roughly two-thirds of global cobalt. The IEA notes that the impact on overall EV battery costs is far smaller than it would have been a decade ago, because high-nickel chemistries use relatively little cobalt and lithium iron phosphate (LFP) batteries use none.
LFP Now Powers More Than Half the EV Market
Lithium iron phosphate crossed a threshold in 2025, accounting for over 55% of EV batteries deployed globally, up from nearly 50% in 2024. Deployment remains heavily concentrated in China, but uptake is expanding rapidly in other emerging markets and developing economies, where LFP batteries now power two-thirds of electric car sales, double the share in 2023.
LFP packs were more than 40% cheaper than NMC alternatives per kWh in 2025, but the IEA flags a sustainability problem. Many cathode active material producers are currently operating at a loss while continuing to expand capacity, which raises the risk of market consolidation. Either outcome, the agency says, would put upward pressure on production costs.
The regional price gap widened too. Battery pack prices in China were 30% lower than in North America and 35% lower than in Europe in 2025, compared to 20% and 25% gaps in 2022. For European automakers trying to match Chinese EV prices, that spread is the number that matters.
Profitability Splits the Industry
Not every battery maker is feeling the same pressure. Korean producers have sustained profitability problems, with SK On reporting recurring operating losses. CATL, the world's largest battery producer, recorded operating margins of 10-15% every year from 2020 to 2024 and 18% in 2025. Nearly 35% of CATL's revenue came from overseas activity in 2025, up from 30% a year earlier. Panasonic's battery business also held margins, reaching 14% in 2025, though at significantly lower volumes than CATL.
CATL's revenues were roughly 40% larger than the combined revenues of LG Energy Solution, Samsung SDI, SK On, and Panasonic Energy in 2025, and continued to grow rapidly in the first quarter of 2026.
Sodium-Ion Gains Ground as Lithium Tightens
The IEA's lithium warning lands as sodium-ion technology moves from announcement to production. CATL and Changan unveiled the Changan Nevo A06 in February 2026, the world's first mass-production passenger EV running a sodium-ion pack, with cell mass production due by the end of 2026. CATL's Naxtra cell delivers about 175 Wh/kg, close to LFP, and the company targets LFP-level density within three years. The pack operates from minus 40 degrees Celsius to plus 70 degrees Celsius, and CATL says discharge power at minus 30 degrees is nearly three times that of an equivalent LFP cell.
Sodium-ion will not displace lithium at the premium end soon, but for cheap, cold-climate, city-range cars it is arriving fast. BYD's third-generation sodium cells claim usability for more than 10,000 charge cycles.
Charging Infrastructure Catches Up
Batteries are only as useful as the chargers feeding them, and Europe's network is expanding quickly. The Netherlands ended 2025 with 210,000 public charging points, ahead of Germany at 196,000 and France at 185,000. Five EU countries grew their networks by more than 50% in a single year: Denmark, Estonia, Latvia, Lithuania, and Romania. Ultra-fast points at 150 kW and above now make up 11.8% of Europe's public network, up from 9.4% a year earlier, with DC capacity growing 38.5%.
BYD's megawatt-class flash charging arrived in Europe in April 2026 with the Denza Z9 GT, which recharges from 10% to 80% in about six and a half minutes. The company plans 3,000 flash-charging stations across Europe within a year, open to any car with a CCS2 plug. Mercedes-AMG's GT 4-Door Coupé, built on the AMG.EA platform with silicon-containing anodes, charges at 600 kW and goes from 10% to 80% in about 11 minutes, with production starting at Sindelfingen in summer 2026.
What This Means for the Rest of 2026
The IEA's numbers point to a market where volume keeps rising, prices keep falling, but the margin for error narrows. Lithium and cobalt prices have both doubled in twelve months. LFP cathode makers are losing money. Regional price gaps are widening. And the technology that could ease lithium dependence, sodium-ion, is only now entering mass production.
For buyers, the practical effect is a slower price decline than the past two years implied. BloombergNEF expects another small drop in 2026, not another 8%. For automakers, the question is whether they can secure supply at prices that keep EVs competitive with combustion cars in Europe and North America, where batteries cost 30-35% more than in China.
The IEA's full analysis is available through its Global EV Outlook 2026 report. See also our battery tech coverage for more on this beat.