Most experts says battery costs can drop to less than $400/kWh, but not by 2015. A recent Lux study, "Material Innovation and Cost-Cutting Strategies for Lithium-Ion Batteries in Transportation," predicts a pack cost of $397/kWh by 2020. In late February, David Cole of the Center for Automotive Research told us that engineers inside Ford and GM are betting the cost could drop below $400 by 2020. Industry analysts tend to say battery costs could drop by about one-third in the next five to 10 years.
"In our forecasts, we've predicted that it will hit the mid-$500 range within five years," said Dave Hurst, a senior analyst who studies electric cars for Pike Research. "The raw materials aren't going to get much lower at this point. The power electronics -- the circuit boards -- aren't coming down, either. So the only place you'll gain efficiencies is in the assembly of the cells and the assembly of the packs."
Most analysts say that better battery technology would change the cost scenario, and that batteries that enable electric cars to drive farther or recharge faster would boost demand. Increased demand would provide the economies of scale that the industry is seeking. Unfortunately, analysts still don't see that on the horizon.
"Either the batteries are going to have to cost less or give dramatically better performance for the same cost," Sathawane said. "But neither of those scenarios are likely to happen by 2015."
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There's no doubt that there should be significant progress made in reducing the costs of EV batteries, particularly considering how much time, resources, and funding (government and private sector) is going into fueling new development in this area. However, given that it's an election year, I'm betting that this report probably leans towards a more bullish forecast as the current administration wants to paint its efforts in a favorable light. Hopefully, people can see past the politics and focus in on the important takeaway that there will be light at the end of the tunnel and with enough grit and engineering ingenuity, EV battery costs will come down over time, just like the cost of any new innovation. It's all part of the process.
Beth, you hit it right on the head. These devices are following the normal technology demand curve. A good example is flat screen TVs. It was both demand and innovation that contributed to the rapid decline in prices and increasae in capability. I see both for EV batteries. The current technology, as is, will not be what we have when the price comes down. As for predicting the timing, lot's of luck.
Beth, you're right; I'd prefer to see such a report from the CBO instead of the President's administration. Such a report will never escape the bias from its source. Better yet, have an organization the likes of Consumer Reports generate the report.
I wonder how production in China will affect battery prices in coming years. China has certainly worked to bring down the coast of solar panels in recent years. I understand they are also targeting EV batteries as a market they want to grab.
Fred Smith, CEO of FedEX said this about where he sees the local delivery industry going...
"I think in three or four years you will have a battery vehicle with a range that's probably double what it has today — a couple of hundred miles versus a hundred miles — and it'll probably be 25 percent to 40 percent cheaper than [it] currently is."
"An all-electric pickup and delivery van will operate at a 75 percent less per-mile cost than an internal combustion engine variant," he says. "Now, I didn't say 7 1/2 percent — [I said] 75 percent. These are big numbers.
Smith says he believes that six years from now, electric vehicles will be in wide commercial use, transporting everything from FedEx packages to plumbers and pizza.
As for where battery prices are now, let me offer this...
Better Place, the company currently building car-charging and battery-swapping networks in Israel and Denmark, is purchasing batteries for cars at $400 per kilowatt hour for delivery in early 2012, according to company executives.
"The government report cites investment in advanced battery research as the reason for the projected price drop"
Unless and until without some technology development happens, how can we say that packing cost can come down? Investments, doesn't mean that cost factor can bring down. For that, low cost technologies have to develop and government also has to contribute by keeping the tax level at minimal.
Personally, I have a hard time believing any forecasts from the government (either those currenlty in who want to keep their jobs, or those currenlty out that would like to get those jobs) during an election year. The timing and massaging of various reports and data can be suspect.
Lithium-ion battery prices will drop rapidly over the next 10 years, setting the stage for plug-in vehicles to reach 5%-10% of total automotive sales by the mid- to late-2020s, according to a new study.
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