Electric-car battery-pack prices have fallen 13% in 2020, in some cases reaching a crucial milestone for affordability, according to an annual report released Wednesday by Bloomberg New Energy Finance (BNEF).

Average prices have dropped from $1,100 per kilowatt-hour to $137 per kwh, decrease of 89% over the past decade, according to the analysis. At this time last year, BNEF reported an average price of $156 per kwh—itself a 13% decrease from 2018.

Battery-pack prices of less than $100 per kwh were also reported for the first time, albeit only for electric buses in China, according to BNEF. The $100-per-kwh threshold is often touted by analysts as the point where electric vehicles will achieve true affordability.

Batteries also achieved $100 per kwh on a per-cell basis, while packs actually came in at $126 per kwh on a volume-weighted average, BNEF noted. The reported predicted that average battery-pack prices will be $101 kwh by 2023—about the same timeframe BNEF predicted last year.

"Price reductions in 2020 are thanks to increasing order sizes, growth in BEV sales, and the introduction of new pack designs," the report said, adding that new cathode chemistries and decreasing manufacturing costs will continue to drive prices down in the near term.

Mercedes-Benz battery production

Mercedes-Benz battery production

A glut of lithium last year crossed with a tight supply of other materials needed for batteries left the industry accelerating work on new chemistries and battery types.

Even if the price of raw materials returned to highs seen in 2018, that would only delay achievement of the $100-per-kwh milestone by two years, James Frith, lead author of the report, said in a statement.

BNEF's analysis shows impressive progress for the EV battery industry. Even $200 per kwh by 2020 sounded far-fetched in 2012, but the industry easily beat that.

Predictions earlier in the year by Wood Mackenzie already noted that while the pandemic might slow EV growth (they were largely wrong on that count), it wouldn't hamper battery affordability targets.

Tesla also discussed plans for much cheaper batteries at its Battery Day event earlier this year, while Toyota has claimed performance improvements from solid-state batteries that could enter production by the middle of the decade.