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."