Electric car battery prices to plummet in coming years, says study

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Battery pack

The cost of an electric car battery could come down 70 percent by 2025. Photo Credit: LossIsNotMore/Wikimedia Commons

A recently released study by business analysis company McKinsey and Company suggests electric carĀ  battery prices are going to plummet in coming years. The firm believes that the cost of batteries for an electric car could drop 70 percent in the next 13 years.

Plummeting price of electric car battery packs to come

According to Reuters, business analysis and research firm McKinsey and Company have just released a report suggesting that the cost of an electric car battery, specifically the lithium-ion battery cells which make up the battery pack of an EV, will drop in coming years. The firm believes that the cost will drop 70 percent by 2025.

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Some of it is do with gas prices and stringent emissions standards but, according to AutoGuide, McKinsey and Company found 40 different factors would affect the cost. The three most important influences were the economy of scale, a decrease in the cost of components and improved battery capacity. In other words, as more batteries are made, each unit gets cheaper to make, the parts to make them get cheaper and the batteries improve to the point that they can compete with gas-powered cars.

Taking a cue from laptops

Currently, each kilowatt-hour of capacity in an electric car battery costs between $500 and $600, according to Reuters. A 24-kWh battery pack, like that in the Ford Focus Electric, costs Ford upward of $12,000 to $15,000 to buy, which it then puts in the car. McKinsey believes that by 2020, the cost per kilowatt-hour will drop to $200 and five years later, will sit at $160 per kilowatt-hour.

Electric vehicles become cost-competitive with fossil fuel-powered cars at about $250 per kilowatt-hour, with gas at $3.50 per gallon. In other words, when batteries become that cheap, an electric car can be sold at a price point equivalent to that of a normal car. Lithium-ion batteries for consumer electronics, such as the iPad, iPhone, or the garden variety laptop computer, are about $300 per kilowatt-hour.

Strides being made

Any technology put into widespread use gets improved over time. It gets cheaper at scale, people find ways to make it better and so on. It’s only natural that lithium-ion batteries would do likewise. Strides are being made all the time.

According to Forbes, a California-based startup called Envia announced in February that it had successfully developed a lithium-ion battery with an energy density of 400 watt-hours per kilogram. By contrast, the Tesla Roadster produces 121 wH/kg., according to Tesla, compared to 100 wH/kg for the Focus Electric and 97 wH/kg for the Nissan Leaf. The company is working on increasing the number of charge cycles, meaning the number of times a battery can be depleted and re-charged. Currently, they are at 400 cycles. The Nissan Leaf, with a theoretical range of 100 miles and a 100,000-mile power train warranty, according to Nissan’s specs, would have roughly 1,000 charge cycles.

Energy density, according Forbes, just like processing power of microprocessors, increases steadily over time. Currently, the highest available energy density in lithium-ion batteries increases by about 5 percent every year.

Sources

Reuters

AutoGuide

Forbes

Tesla: http://www.teslamotors.com/roadster/technology/battery

Nissan Leaf: http://www.nissanusa.com/leaf-electric-car/vehicle-overview?next=ev_micro.root_nav.overview

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