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.
I should add that while I believe that delivery trucks will be the primary market, I'm not as optimistic about 2X range and 50% cost. The ace-in-the-hole, though, is the Envia battery, which is under development in conjunction with General Motors. If the Envia battery is successful, then your numbers will be right on target.
Just currious if any of the commentors currently own a production EV or have a friend with one ?
My wife and I own two ICE vehicles (can't yet bare to part with my beloved 1997 XJR) and a wonderful Nissan LEAF all-electric. It is fun to drive, with a surprisingly enjoyable acceleration curve; constant from any starting rpm and costs us $2.10 in electricity per 100 miles here in the NW. Since late May 2011 we have logged 7700 miles in the LEAF and 3 tankfuls of gasoline in the Volve S80 (3/4 tank in the XJR).
It is already eminently practical for us right now and cost less than the Volvo S80 which we purchased new several years ago. Nissan is rumored to have the lowest EV battery cost per KwH in the industry, perhaps 1/2 their closest compeditor and the warranty for 80% charge retention is 8 years or 100k miles. Agreed it is still a bit pricey and not for everyone, especially single car households, but gosh do yourself a favor and test drive one before any detailed critic of EV viability.
"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.
I am concerned about the trend I see (largely in the media and political world) to compare battery technology development with emerging "high tech" items.
Batteries have seen a great deal of intense development for what, 200 years? This is a very mature industry. Could we get a breakthrough tomorrow? Sure. Should we continue to seek one? Abosolutely. Should we base our forward looking game plan on the assumption that this will happen? Count me as a bit reluctant.
I agree on all counts, Dennis. The breakthrough will come eventually, but there's no guaratee that throwing money at it today will bring about a breakthrough tomorrow. It requires discovery, which can't be planned. Regarding the long history of battery development, see the link to the article below.
Bunter, you're right on the mark. In politics and journalism, people talk about the "Moore's Law for batteries," which DOES NOT exist. Moore's Law describes a manufacturing situation -- the ability to make smaller and smaller feature sizes on a semiconductor chip. Batteries, in contrast, are subject to the laws of material science. True, manufacturing will bring the costs down to some degree, but not in a Moore's Law fashion. And manufacturing will do little or nothing for energy density. To get a sense of the history, take a look at this:
A recently released government report has raised the hopes of automakers looking for a break on future fuel economy regulations, despite the warnings of an Environmental Protection Agency official who said the agency is unlikely to back down on its goal of 54.5 mpg by 2025.
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