A cheaper battery chemistry really is cheaper, worldwide
Lithium iron phosphate, a battery chemistry known as LFP, uses iron and phosphate instead of nickel, manganese and cobalt, the 3 metals in the more common chemistry called NMC. BloombergNEF, a market research firm that surveys battery prices every year, found LFP battery packs averaged 81 dollars per kilowatt hour worldwide in 2025, a kilowatt hour being the unit that measures how much energy a battery can store. That is about 37% less than the 128 dollars per kilowatt hour NMC packs averaged the same year, a MAOWCE calculation using those 2 figures. Across all chemistries, the overall market average fell 8% in 2025 to 108 dollars per kilowatt hour, a record low. Evelina Stoikou, head of the battery technology team at BloombergNEF, said this about the trend.
A BloombergNEF 2025 survey, pack level prices, not cell level prices.
Show the numbers
| Lithium iron phosphate | 81 |
| Market average | 108 |
| Nickel manganese cobalt | 128 |
Cut-throat competition is making batteries cheaper every year.
Evelina Stoikou, head of the battery technology team at BloombergNEF. Source 1.
Tesla sold the cheaper car in the United States
Tesla built a real version of that saving into a shipping American car. The Model 3 Standard Range RWD used lithium iron phosphate cells sourced from China and carried a sticker price of 38,990 dollars. The Model 3 Long Range RWD, built with a nickel manganese cobalt battery, sat next to it at 42,490 dollars, 3,500 dollars more. The cheaper trim also had less range, rated at 272 miles against 363 miles for the pricier trim, since a lithium iron phosphate battery stores less energy for the same weight than a nickel manganese cobalt battery does.
The 34,990 dollar row is the price after the 7,500 dollar federal tax credit some buyers received. The discontinued trim did not qualify for that credit.
Show the numbers
| Standard Range RWD sticker price | 38,990 |
| Long Range RWD sticker price | 42,490 |
| Long Range RWD after tax credit | 34,990 |
A tariff and a lost tax credit removed the saving
On September 27, 2024, a United States import duty on lithium ion batteries built for electric vehicles and imported from China rose from 7.5% to 25%, more than 3 times its earlier rate, under a trade rule published by the Office of the United States Trade Representative. The same rule raised the duty on complete electric vehicles imported from China to 100% that same year, which is why the choice facing Tesla was never a Chinese built car, only a Chinese made battery inside an American built one. Within days, Tesla removed the Standard Range RWD from its United States lineup, leaving only the pricier nickel chemistry trim on sale. A second, separate rule added to the loss. The Standard Range RWD, built with a Chinese made battery, did not qualify for the 7,500 dollar federal tax credit that the Long Range RWD did, so a qualifying buyer paid an effective 34,990 dollars for the pricier trim, a gap that had already narrowed before the tariff even applied. The cheaper trim has not returned to the United States market since. The Model 3 lineup for the 2026 model year lists a Standard RWD trim rated for 321 miles, a different range from the discontinued car, and no source read for this article states what battery chemistry that current trim uses.