Battery packs have long been the achilles heel of electric cars, thanks to both their relatively limited energy density when compared to other fuel sources and the cost of making them.
But since cars like the Nissan LEAF and Chevrolet Volt launched onto the market in late 2010, there’s been a massive shift in both electric car battery pack energy density and the cost to manufacture them.
Now a new study, “Rapidly Falling Costs of Battery Packs for Electric Vehicles,” published in last month’s Nature magazine, suggests that the cost of electric car battery cells have dropped below a price point previously predicted for five years’ time, at an average rate of 14 percent per year since 2007 through 2014.
Using data from 85 different sources, including peer-reviewed journals, analytical reports from industry insiders, statements from automakers and interviews with battery specialists, the study plotted battery costs over the past seven years. It then used that data to estimate current battery pack costs and predict future battery pack costs moving forward.
For ‘market-leading’ companies like Tesla Motors [NASDAQ:TSLA] and Nissan, the study reports that a price point of $300 per kilowatt-hour has already been reached, something previous studies had predicted would happen some time in 2020. In Tesla and Nissan’s case, that rate of decline in costs has occurred at around 8 percent per year.
In addition to reaching the $300 per kilowatt-hour point five years ahead of previous predictions, the steady decline — stepped rather than purely linear due to generational jumps in battery design — shows that we will soon be at a point where electric car battery cells are cheap enough to make electric cars cheaper than internal combustion engine cars.
The decline in costs for lithium-ion battery pack prices is predicted by the study to continue a downward curve that follows a similar path to lithium-ion battery pack costs for things like laptop computers and gadgets, which have over the past twenty years of so shown an annual improvement of 7 percent when it comes to cost and performance.
But perhaps the most exciting revelation of the study is the future prediction that electric car battery packs may reach a price point at or near $150 per kilowatt-hour within ten years.
And that, would make electric cars far cheaper than conventional internal combustion engine vehicles.
What’s also worth noting from the study is that while costs between the cheapest and most expensive electric car battery cells were in the order of $1,000 or more five years ago, in five to ten years, the costs between the most expensive and most affordable battery packs will be only a few hundred dollars.
And that could make things very interesting indeed, especially for major automakers wanting to play catch-up to Tesla Motors.
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