New Study Suggests Electric Car Battery Prices At Tipping Point for Mass-Production

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.

Battery packs for electric vehicles are getting cheaper and cheaper -- and more quickly than previously thought.

Battery packs for electric vehicles are getting cheaper and cheaper — and more quickly than previously thought.

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.

Battery costs moving forward could be as low as $150 per kilowatt-hour in under ten years.

Battery costs moving forward could be as low as $150 per kilowatt-hour in under ten years.

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.

As battery cell prices drop, so too does the difference between market leaders and trailers.

As battery cell prices drop, so too does the difference between market leaders and trailers.

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.

————————————

Want to keep up with the latest news in evolving transport? Don’t forget to follow Transport Evolved on Twitter, like us on Facebook and G+, and subscribe to our YouTube channel.

______________________________________

Want to keep up with the latest news in evolving transport? Don’t forget to follow Transport Evolved on Twitter, like us on Facebook and G+, and subscribe to our YouTube channel.

You can also support us directly as a monthly supporting member by visiting Patreon.com.

Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInDigg thisShare on RedditEmail this to someonePin on Pinterest

Related News

  • Bob_Wallace

    What’s left out in the ” far cheaper than conventional internal combustion engine vehicles” is the EV range. Are we talking 200 mile range EV? More? Less?

    • It’s not about range: It’s about cost per kilowatt-hour. Once that drops to a low enough point, cars being on parity means having the same kind of performance and range. But that’s a moving target, as I’m sure you appreciate.

      • Bob_Wallace

        No, a 100 mile range EV (~25 kWh pack) will cost less than a 200 mile range EV (~50 kWh pack). If one does not specify the range (size of battery pack) then the “far cheaper” comparison has no meaning.nnnI read the paper after commenting. The authors are not very clear but they seem to be talking about a 25 kWh pack. The paper is about cost of batteries but that “far cheaper…” point is not well thought out.

    • Terence Conklin

      The statement: ” far cheaper than conventional internal combustion engine vehicles” includes (for me) costs associated with the car as well. Even my Toyota Prius hybrid saves in other mechanical areas like brake endurance, lack of starter, transmission, clutch, etc worry, repairs, and maintenance. A total electric of 200 mile range has even more savings like no more fuel costs, oil and filter changes…Going beyond 200 mile range will come with advances in energy density or giving up interior space for more battery volume. I’ll be all over a 200 mile range in my price range of under $40-45k.