How Much And How Fast Will Electric-Car Battery Costs Fall?
2014 Chevrolet Impala 2.5-Liter Four-Cylinder: Quick Drive
The new 2014 Chevrolet Impala is a big five-passenger family sedan, the largest one Chevy sells... Read More
- #4LEADERBOARD RANK
- 2905ARTICLES CONTRIBUTED
- 1958COMMENTS POSTED
Add to circle
Lithium-ion battery pack for 2011 Chevrolet Volt
Related Photo Galleries
-
How Are Electric-Car Batteries Made? Photos...
-
Could Small 2015 Chevy City Express Van Offer...
-
Gasoline, Diesel, Hybrids And Plug-Ins: The...
See more photos »
Also See
-
Phinergy 1000-Mile Aluminum-Air Battery: On The...
-
Mercedes-Benz SLS AMG Electric Drive Supercar...
-
2014 Cadillac ELR Video Preview
See more video »
You hear both sides of the battery cost question a lot when you cover electric cars.
One side says, "Electric-car batteries will be brutally expensive for many years to come, so electric cars will never be practical."
The other side believes, "With wonderful new discoveries coming out of labs and the pace of progress in electronics, batteries will soon cost just a fraction of what they do today, making electric cars cost no more than combustion cars--or even less."
No Moore's Law
There are elements of truth to both, but it's all about the rate of change.
It's often said, "There's no Moore's Law for electric cars"--meaning that lithium-ion battery cells do not double in performance every 18 months, as processor speeds have done.
Instead, the best proxy is to look to the consumer lithium-ion cell maket, now more than 20 years old.
The small commodity cells in your mobile phone and portable computers are now just a fraction of the cost of the first lithium-ion cells that Sony launched in a 1989 video camera.
Averaged over that time, the rate of performance increase has averaged 6 to 8 percent a year.
Consumer cells show the way
It hasn't been linear, with improvements in both cell chemistry and process technology leading to notable declines once volume production is achieved, followed by a cost plateau.
But we've talked to half a dozen cell makers over the last 18 months, and all of them accepted a 6-to-8-percent annual performance improvement as appropriate for the large-scale automotive cells used by every plug-in carmaker except Tesla Motors.
A 2010 National Academy of Sciences report estimated pack costs then at $625 to $850 per kilowatt-hour.
So where does that take us? If we assume that the 2011 Chevrolet Volt's 16-kWh pack cost roughly $750 per kilowatt-hour (or about $12,000), then we can project the two rates of decline.
At 6 percent a year, the same pack in 2020 would cost just $430/kWh, or $6,500 in total. At 8 percent, it would be even cheaper, at $354/kWh or $5,200 altogether.
2020: $200 to $500 per kWh?
Those numbers tie neatly to estimates by clean-tech market intelligence firm Pike Research--contained in Electric Vehicle Batteries, a very pricey report--that the installed cost of lithium-ion batteries will fall by more than one-third by the end of 2017.
Estimates of electric-vehicle battery costs (first published in Tech Review, Jan 2012 issue)
Pike also projects that the market for such batteries will grow from $2.0 billion last year to almost $15 billion by 2017.
Even better, the technology magazine Tech Review (registration required) analyzed Li-ion cell cost projections through 2020 from a variety of sources, including financial institutions, industry analysts, and electrification groups.
Their projections for costs in 2020 ranged from a low of $225 per kWh to $500/kWh from the most pessimistic sources--but both high and low estimates declined roughly 7 percent a year.
Real costs? No one will say
The actual cost of lithium-ion battery packs is one of the most closely guarded secrets in the electric-car world. We've not found a single maker willing to go on record and say what their cost per kilowatt-hour is.
That's why a statement by Tesla Motors CEO Elon Musk that cell cost would go below $200 per kilowatt-hour "in the not-too-distant future" made such news last month. In general, the pack adds another 15 to 20 percent on top of the cost of the cells themselves.
Awaiting the hockey stick
Most industry analysts believe that the "hockey stick" demand curve for electric cars--when the rate of increase in demand starts to accelerate--will come in the later years of the decade
Nissan CEO Carlos Ghosn says that for his company, it will be in 2016, when the Nissan-Renault Alliance can make up to 1 million battery electric vehicles a year. For the rest of the industry, it's likely to be closer to 2018 to 2020.
Meanwhile, if you hear someone say that electric cars will plummet in cost just next year, raise your eyebrows.
And do the same if you hear elsewhere that plug-in cars will never be practical, because batteries will cost "tens of thousands of dollars" for the next 20 years.
Take the long view. Change is coming, and it will most likely be at a rate of about 7 percent a year.
+++++++++++
Follow GreenCarReports on Facebook and Twitter.
Related Articles
-
How Are Electric-Car Batteries Made? Photos From Nissan's New Plant
-
Toyota Accelerates Switch To Lithium-Ion Batteries, Still Lags Others
-
Wyoming Lithium To Make U.S. Self-Sufficient In Electric-Car Batteries?
-
Will Future Tesla Electric Cars Use Metal-Air Batteries?
-
U.S.-Built Electric Cars To Get U.S.-Made Battery Cells Too
-
Follow Us
On Facebook
Most Popular This Week
More »
Audi Startled By Tesla Sales Success? Deleted Press Release... 
Can Tesla Raise More Than $1 Billion On Soaring Stock Price? 
Four Used Plug-In Electric Cars To Avoid 
How Are Electric-Car Batteries Made? Photos From Nissan's New... 
Toyota Accelerates Switch To Lithium-Ion Batteries, Still Lags... Find Green Cars
Photo Galleries
More from High Gear Media
- Follow Us
Have an opinion?
Sure there is added costs in packaging the batteries and perhaps someone wants to include the charger costs into the "battery pack" costs. But in any case, these estimates seem way out of line with retail pricing that can be easily checked on the internet if anyone has a little time and interest.
The universe of cell suppliers to the auto industry is pretty small, and I have serious doubts that any carmaker would use many of the cells that are available at retail for $400/kWh. There's a big difference between a cell sold to a hobbyist converter and one sold to a global OEM that must be warrantied for 8 or 10 years.
But my info could be out of date.
However, it may indicate a faster decrease in price is possible given that the material costs of making a second tier battery and a first tier battery are probably about the same.
I have seen dramatic drops in these types of components in the pasts, but they never drop below the raw materials costs. I prefer to look at such pricing from base level material cost plus a small profit rather than market surveys. Market surveys can be hugely flawed as it is lair's poker out there in the business world.
Most importantly, is to have two suppliers qualified so that you can play them off each other. But auto companies prefer single source.
A well done pragmatic piece looking at past history as a guide. Well done. I would offer two admittedly hopeful additions.
1. More investment = more breakthroughs thus a higher percentage of improvement in the future
2. An auto industry in it's electric car infancy can mature rapidly due to the embodied energy represented by the industry.
So its m thy belief that the cost of electric cars will come down more rapidly that people think. 2015-2018 should bring parody in cost between ice and electric.
Cheers
Peder
as i have said many times, the prices will come down when it is needed to sell the cars that have been manufactured, and not one second before.
five years ago, all the gurus that you read, all stated that batteries to run cars was 25 years down the road. all we had was the lunky lead acid batteries.
shazam - out of the clear blue we have batteries that can make a car go for 100 miles, and drive better than an ice.
the lesson to be learned - the real bigwigs have technology at their disposal way before the masses know about it.
if they dont want it, you can read all sorts of articles about all the problems that exist.
Not sure which "gurus" you read five years ago, but if they said lithium cells for cars were 25 years down the road--they didn't know what they were talking about. Li-ion cells for cars are hardly "out of the clear blue," LOL.
And the "masses" can get access to more info about advanced technologies now, via the web, than they ever could before, say, 1990. Whether they do their research or just listen to talking heads is a different question, of course.
print this discussion out for yourself. you will find it useful in the future when you look back.
what i have told you is how life works. few people ever realize it, which is why the masses are easily controlled by the bigwigs.
the bigwigs have plans in the future for at least a generation.
it was no coincidence that your beloved gm sold the battery technology that it had to the oil companies.
your way of looking at things is passive, and just exactly what the bigwigs want of us.
my way of looking at things is how life works.
when the price needs to come down to sell evs, the price will come down. when range needs to come up, range will come up.
i have been following evs for over 20 years. several times it looked like it was coming, and then it didn't.
big money can and will stop anything it does not want - TAKE THAT TO THE BANK. it is the easiest money you will ever earn.
if they wanted, they could give us 400 mile range TODAY.
if they wanted, they could sell us an ev much more cheaply.
i will revert back to my tv comparison. they want from 16 to 17 to 19, etc. they increased the size only enough to get people willing to buy tvs for the year. they want as much of our money as they can get.
again, THIS IS HOW LIFE WORKS.
(1) You and I clearly differ on "how life works." I hope I never become sufficiently cynical or paranoid to subscribe to the notion that "the bigwigs have plans in the future for at least a generation." In the real world, conspiracy theories would require all parties to act with 100% efficiency, as in the movies--which the oil industry, auto industry, and nefarious Gummint agencies are repeatedly and demonstrably incapable of.
(2) You have yet to provide a single link to materials contradicting my 7% consensus number. That rather speaks for itself to intelligent readers.
(3) Damnit. I forgot the primary internet rule: Don't feed the trolls.
1) I don't subscribe to the view of a small cabal of bigwigs ruling the world but I do think that when big corporations like oil companies predict that plug-ins will be marginal for decades to come they have the money and influence to help make these predictions come true.
2)There is a contradiction between noting that nobody will go on record about their cost yet quote them on the (irrelevant IMO)7% rule. You still haven't explained how this rule fits with Tesla offering batteries at $400/KWH either.
3)Really John, people with dissenting opinions are trolls now?
(2) Give me a link on the $400/kWh Tesla battery & I'll investigate. Tesla is thought to have the lowest per-kWh costs in the industry because it uses many CoO2 commodity cells. Other carmakers view that as a higher risk than they will tolerate.
(3) I was wrong; shouldn't have made the troll comment. Even authors get irked by readers--with no facts or hard evidence--saying they're naive & don't understand "how the world really works." Mea culpa.
About the troll remark: fair enough, everybody gets irked sometimes...
About the Tesla $400/KWH: Like I mentioned it follows from the Tesla price list. If a company offers the same model with different batterypacks(not CoO2 BTW;new LiNiO2 chemistry for Model S) some simple math will reveal their $/KWH retail:
http://www.teslamotors.com/models/options
60KWH: $59900;85KWH: $69900 (I know, after the $7500 tax credit...)so $10K extra buys you 25KWH extra which boils down to $400/KWH. That's the sort of options where Tesla presumably wants to take it's profits (there is a reason the smaller packs aren't even available yet). So speculating about cost: somewhere below $300/KWH? Please investigate; this is fascinating stuff...
(1) Carmakers price & bundle options for maximum profit. The retail option price is almost never the same as its cost to the maker.
(2) The incremental cost of 1 kWh more in a pack of XX kWh may not equal the per-kWh cost of the first XX. It likely depends on pack volume, more sensors & wiring, plus other factors I'm not familiar with.
I've heard, and believe, that Tesla has some of the lowest per-kWh costs in the business--because they use commodity cells. I'd believe a $400/kWh cost to them, or a bit less.
But that's only marginally relevant to other makers, since they all use large cells. And I've asked; Tesla won't comment on pack cost.
How can I comment on this without violating GCR rules about no personal attacks. I know, an anecdote.
I spent all of yesterday at the MIT Energy Conference Technology showcase. It was a great and sometimes amusing experience to talk to smart self-assured MIT students. Some of them have the amusing habit of looking at a concept that they have seen and considered for 120 seconds (that you have been developing for years) and telling you why it will never work. The adjective that kept coming to mind was "arrogant" .
History shows that when it comes to new and disruptive technology like electric motoring the opinions of "experts" really count for very little.
Oh, and obviously the fact that historically battery prices declined by about 7% per year is probably just not true to begin with and anyway just a meaningless observation without any power to predict future developments in the field of battery tech.
If you're referring to the Tesla Model S Pricelist here:
http://www.teslamotors.com/models/options
Here's why:
1. Assuming that the cars are actually being priced at-cost, the marginal-price-per-KWH is $500/KWH when moving from the 40KWH model to to 60KWH model, and it's $400/KWH when moving from the 60KWH model to the 80KWH model.
2. The cars are not priced at cost. We don't know what their bill-of-materials looks like.
3. Maybe they make less money on the higher end vehicles. Serious luxury cars cost $50k, and they expected to sell more of the low-production-cost base models, so maybe they chose a higher margin on that car than the others.
I'd love to hear the logic behind your number.
If you're referring to the Tesla Model S Pricelist here:
http://www.teslamotors.com/models/options
I remain skeptical.
Now we don't know if Tesla is taking a loss, or making a profit at that price, but I am guessing they are making a profit. So I would say $769/KWH is the absolute maximum for Tesla batteries. This is well below the high end estimates for 2010 shown in the graph.
I have seen these costs handled in two ways.
First the customer (e.g. GM) can have the NRE rolled into the unit cost of each of the first, say, 20,000 pieces. This obvious inflates the price of the unit and the $/KWH.
Second, I have seen companies pay all the NRE and Tooling as an upfront costs to get a clearer representation of the unit pricing. This will lower the unit cost because these expenses are no longer considered. In low volume products, this is probably the fairer way to consider $/KWh.
within 5 years. When Toyota and the Tokyo Institute of Technology make claims, I believe them.
i have no desire to comment on your percentage consensus, because it is meaningless.
prices and ranges will be whatever is necessary to sell the cars manufactured.
your notion that all this is hard work, and then use the technology when it is first available is tremendously naive.
damnit. i forgot an important internet rule - dont try to educate someone who wants to keep his head in the sand.
the electric car came out before the gas car. when rockefeller saw that he could sell his oil, the electric car went away. read about the blue/red line in long beach, california.
to quote you, that rather speaks for itself for intelligent readers.
oil is one of very few products whose price is not about supply and demand. opec can raise or lower their price whenever they dang want to. this recent rise in price by over a dollar in the past month or two is proof of that.
oil as an actual commodity, did not increase in price for any other reason than that is what the bigwigs desired.
but then you still cant admit that gm is and was tied to big oil. despite the FACTS that they crushed the ev1s that consumers were begging gm to let them buy. despite the fact that they sold the battery technology to big oil.
that speaks volumes to our intelligent readers.
2008 they found, that industry decreases faster costs as expected. 10% less per year.
http://politics.pege.org/2008-d/photovoltaic-eeg.htm
The feed in tarifs should have been 32,77 Cent per kWh
2010 they found, that industry even faster decreases costs.
Now they reduce the feed in tarif for new systems to 19 Cent per kWh.
Let's hope this fast unecpected progress happens also at the batteries.
Could you clarify one thing. In the article, there is a mention of a 7% annual "performance" increase. However, the calculation seem to suggest a 7% "price" decrease. Does "price" and "performance" track one another in batteries, or am I misunderstanding something. I am getting confused about whether we are talking about performance or price, and if we are talking about performance, are we talking about KWH/KG or some other metric.
Thanks
John C. Briggs
What I was trying to convey was that the performance per dollar of cost increases 7% a year (on average) OR the cost per kWh decreases 7% a year. You get either better performance for the same cost, or less cost for the same performance. (I know a 7% increase is not mathematically the inverse of a 7% decrease, but we're talking averages here.)
Does that help?
I guess it may make sense to roll-up price and performance together in a metric like $/KWh. Sometimes the improvement comes just from the manufacturing cost reductions, other times it comes from getting more KWh out of the same materials which effectively lowers costs.
Solar panels are similar with $/Watt. There are cost reductions and performance improvements (e.g. more KW per panel), but by using a $/Watt metric, the two are rolled up into one metric.
what i am saying is that "wealth" rules the world. they ultimately get their way. how small this "cabal" is, i dont know. but a very small percentage of people control a very large percentage of the wealth.
even moreso in other countries than the usa, where the distribution of haves and have-nots is even more skewed.
regarding evs, we dont have worry about us not having the technology to sell cars. that is the point i am trying to make.
it is not about whether we can get a car with 400 miles of range, or whether it can break the 25,000 price barrier, etc.
if the wealth wants to sell us evs, then those evs will have traits conducive to people who will buy them. it is really that simple.
range is not that important. it is highly acceptable to a large majority of people. price is a huge deterrent, but our supply is so low, that we still have waiting lines.
these prices are gonna come down fairly quickly, as more and more companies start producing their first ev. because our supply will start growing.
once that happens, and their is real competition, the prices will come down. and boom, magically "inventions" will be released that accomodates the ev industry.
they could keep prices at this point, and evs will never replace ices for the masses.
but it is all about what the bigwigs really want. not about whether we have the technology available.
here is another small example in which i played an active role.
i am a health food person. there is a natural sweetener called stevia that comes from a plant native to south america, if i recall correctly.
it has been used there for over a 1000 years, so it has a better long-term safety factor than just about anything on the planet.
the sugar industry at first tried to outlaw its sale entirely here in the states, by having the FDA ban it.
another one of our government agencies that is owned by the wealthy - lock, stock, and barrel.
we health food consumers fought back, and we were able to keep it here.
and it could not be placed in items, like cereal, etc. to my knowledge, the situation has not changed. i dont think you can get a box of cereal in the supermarket that is sweetened with stevia.
if we removed all this excess processed sugar from the average diet, we would almost delete diabetes entirely. people would lug around a lot less fat, and be far more healthy.
we would have a lot less health costs, etc.
but we dont do this, for one reason. the sugar industry is able to control the situation here in the states.
just one of many examples that can be seen on how wealth controls.
Clearly you are really passionate about these things. Keep in mind though that what sometime seems like one big conspiracy by a small cabal of very powerful people that pull all the strings is probably just corporate capitalism at work. It's moderately powerful vested interests using their networks to further their own interests and frustrate competitors. I do believe that large corporations have an arsenal of tricks and cheats to make sure new technology that's a threat to their business doesn't make it to the market or at least gets delayed as long as possible. That's not the same thing as absolute control by a small cabal of puppet masters though.
i think there has been some misunderstanding. i did not mean to infer that there were 3 people in an ivory tower somewhere, pushing buttons.
i said that there were a small number of individuals who control the world. that control comes from having money, and owning things.
so of course, they are owners/controllers of big corporations, and such.
in fact, if i sat down with you and had a personal talk, i am not sure that we would have anything to disagree about, on this particular subject.
when i say a "small" number, that is comparison to the total population. i dont know just how small it is, but it would not surprise me if it was 10,000 people.
it would not surprise me that "energy" as a product, is worth more than all other products put together.
we are talking gasoline, electricity, etc. without it, we may as well live in an isolated cave.
i think it would be terribly shortsighted and naive to think that the bigwigs dont have long-term plans. (a generation or more).
the biggest problem that the bigwigs face is that technology is developing 100 times faster than they need it to.
so their first step is to purchase it all. then they need to figure out how they can sell it, and not only make money, but make more money than they had been.
people are just like cattle to them. they only need the cattle to buy their products. but as individuals, we mean nothing.
if the main goal of the knowledge that we have was to help mankind, instead of making money for the bigwigs, we the people would be light years ahead of where we are today, in terms of quality of life.
run as fast as you can from anyone wanting global unification. what that really means is that they want to control us even more than they already do.
i still have some sort of "fear" that they will pull the plug on evs. as i stated, they can easily do this by buying up and hoarding all technology that would allow evs to come down in price.
but i have NO FEAR that evs wont sell because we dont have the technology to sell them.
if there is one thing you can count on is that if the bigwigs want to sell us something, they will market it in a way that people will want to buy it.
which means the price decrease of the evs will somewhat mirror the supply increase.
it is gonna take some time to make that big of a change.
-"I think it would be terribly shortsighted and naive to think that the bigwigs dont have long-term plans": I think it's naive to think that CEO's look too far beyond next quarter's bottom line on which their bonuses depend.
-"people are just like cattle to them"; that's because most of us lack the ability to think for ourselves; we tend to follow the herd (or "experts"...).
"we are not limited by our lack of technology"; yes we are. Many new ideas for batteries depend on breakthroughs in material science and micro engineering.
"run as fast as you can from anyone wanting global unification"; couldn't agree more....
Electrification Coalition in teir report cited $600/kWh as the average battery cost with several member's prices being lower.
Elon Musk ha commented about how the price of battery has halved from Tesla Roadster to Tesl Model S. We can also get an idea of the prices by looking at the verious Model S prices. It is somewhere between $400 and $500/kWh to the user. This means to Tesla, it is much less.
- Tremendous new investment that has gone into battery reasearch in recent years
- Obvoiusly can't predict breakthroughs. It can only point to historical evolution of prices.
Given this, here is my prediction. I call it "EVNow's Law" ;-)
Li prices will halve every 5 years, density will double every five years.
With the announcement of Envia, I think we are covered for 2015. Hopefully commercialization of Li Air battery by 2020 will take care of another halving of price / doubling of density.
ceos arent money men. they are not part of the elite to which i am referring - at least not usually. so i dont disagree with you that they look at their bonuses. they are also people who may be easily bribed by the money men.
pick any battery technology or micro-engineering that you want. and i guarantee you that it will become available should it be necessary to use it on something to sell to the consumer.
you can do all the research you want on it, at the present. you will hear about all the problems it involves, etc. etc. etc.
IF IT IS NEEDED, those "problems" get "solved" pronto.
if they want to sell us evs, then evs will be like any other product. they will give us just enough goodies for us to give them our money.
I have seen a glimpse of the future and I think that the real breakout will be next Summer for EV model intros. right now its all about price and a bit more range. the 2 car household is the target and that is zeroed in. The range will be there (not quite what we want naturally but it will be enough to move a significant niche into EV land
Have an opinion?Join the conversation!