January 31, 2026: Volta Foundation forecasts that battery pack prices will dip below $100 per kWh in the year ahead. Global battery prices at the pack level fell 9% to a record low of $108 per kWh in 2025, with China LFP pack costs around $84 kWh, down 13% year-on-year. However, pack costs remained materially higher in the US (plus 44%) and Europe (plus 56%).
While average global battery costs may have fallen to $108 per kWh there are regional disparities. Volta said Chinese battery firms have operating capacity at four times market current demand, and pack costs were roughly $84 per kWh, a 13% drop year-on-year.
Separately, according to Volta’s 2025 Battery Report, climate-related investment funds raised $101 billion in 2025, up 40% year-on-year, largely driven by infrastructure funds focused on expanding mature assets such as battery storage plants and datacenters, according to a new report by the Volta Foundation.
However, the global non-profit, which represents professionals and companies across the battery sector, said early stage and growth equity VC funding tightened to $14 billion — down 50% compared to 2023.
, the fall contributed to high profile insolvencies in the sector, most notably Northvolt’s wind-down and Powin’s Chapter 11 filing, which Volta said sent shockwaves through the battery ecosystem, excluding China, and reinforced investor risk sensitivity.
More than $7.6 billion of capital was announced by early-stage VC and corporate venture capital funds towards climate and energy transition, with 50-plus new funds raised, increasing marginally from 2024.
The number of PE stroke growth equity funds increased more significantly, with more than $10 billion of capital announced as well.
Asia’s battery giants gained market value, notably with China-based CATL reporting a net profit of $7 billion for Q1-Q3, while many Western startups and capital-raising special purpose acquisition-era companies struggled to maintain valuations.
China also continued to lead the world in EV market penetration, while Europe returned to growth and the US EV market remained comparatively stagnant.
Chinese battery manufacturers have created a strong foothold in the European market, with one third of gigafactory capacity planned in Europe having Chinese involvement.
Volta said almost all major joint venture battery plants are for the EV sector because there is less of an imperative to localize energy storage battery plants in Europe due to higher costs and minimal trade barriers.
The concern from the European side is that these partnerships currently lack meaningful knowledge sharing, Volta said.
In parallel, the ‘BESS decade’ continued apace, with new energy storage system installations reaching a cumulative capacity of 104GW — drawing extensively on data from research consultancy CRU. That capacity translated to 257GWh in 2025, taking total global BESS capacity to 267GW (610 GWh).
BESS deployment was driven by dramatically falling costs (31% year-on-year decline), plus storage friendly policies and new markets, while BESS product performance — energy density, efficiency and warranties — continued to improve.
Meanwhile, global battery prices at the pack level fell 9% to a record low of $108 per kWh, with China LFP pack costs around $84 kWh, down 13% year-on-year. However, pack costs remained materially higher in the US (plus 44%) and Europe (plus 56%).
Emerging technology trends in 2025 included what Volta said was an aggressive pivot towards LFP, which now accounts for nearly 50% of global EV battery sales and dominates the stationary storage market.
Sodium ion experience a “breakout year” in stationary storage, with grid-scale deployments, while solid state development transitioned from lab breakthroughs to industrial pilot lines, with OEMs targeting 2027 to 2030 for integration.
LFP batteries will further consolidate their position as the dominant chemistry for mass market EVs and BESS (fourth-generation LFP in China). Driven by cost, safety and supply chain scale, LFP is set to represent more than 55% of global lithium ion demand.
