EV Batteries Already Cheaper than Expected

The major obstacle to incorporating eco-friendly electric vehicles into the larger market of more conventional, gas-fueled automobiles has been price. The batteries used for electric cars are often made of rare materials that are difficult to mine, and the cost of obtaining the materials generally transfers to the consumer. On top of that, batteries can be expensive to maintain in the long term, so not do consumers face a higher initial price but they also have to be prepared for pricey fixes down the road.

bats cheaperWhile the price of electric vehicles and their batteries in particular has been expected to remain a major issue for years to come, a new study published by the Climate Change section of Nature found that electric car batteries have actually decreased in price much faster than industry experts estimated. In fact, the batteries for electric vehicles already cost significantly less than what analysts believed the prices would be in 2020.

In 2013, the International Energy Agency made a famous estimate that it would take until 2020 for lithium cell batteries to sink below $300 per kilowatt-hour. However, researchers have stated that the electric car industry has already reached that goal, or at least some companies have. On an industry-wide level, costs were floating around $1,000 per kWh in 2007, but dropped to as low as $140 per kWh by 2014. The study has aslso claimed that some “market-leading firms” like Nissan, which has sold the most EV models to date and Tesla, which has hundreds of thousands of orders lined up for its much-awaited Model 3, have beaten the $300-per-kWh expectation by a long shot.

The study backed up its findings with 85 cost estimates from peer-reviewed academic publications in addition to reports from analysts, the media, and those taken from battery and car manufacturers. While the authors have done a fair amount of research, they were also quick to note that they still aren’t working with a complete body of data in that companies rarely disclose their true costs of manufacturing to the public.

tesla2The authors were also straight-forward about the fact that battery costs still need to drop a good deal further in order to attract the mass appeal of cheaper, gas-fueled cars. They stated that in the United States, for example, the costs must drop to less than $150 per kWh for electric cars to move “beyond niche applications.”

The exact threshold at which point EVs will become price-competitive with internal-combustion models remains difficult to isolate, but many guess that cells would need to run at somewhere around $100 per kWh.

Huge efforts are currently underway in terms of finding alternatives to today’s lithium-ion chemistries. Volkswagen is considering investing in the development of solid-state batteries for future electric cars, though many developments on car batteries remain purely experimental and fairly distant from actual release in the auto market.

Tesla Motors has gained a fair amount of attention for attempting to bring battery prices down by entering economies of scale. It has created an enormous “Gigafactory” in Nevada, where it hopes to create a factory large enough to realize the $35,000 base price for its Model 3 sedan.

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