One of the biggest things holding back sales of electric vehicles is the price of the battery. Sure, you save money on gas and maintenance in the long run, but the price is still not something to sneeze at, even after subsidies and all.
But there is hope – battery prices are falling, and they are doing so faster than one can say “supercalifragilisticexpialidocious.”
A study published in Nature Climate Change used the learning curve theory to estimate the cost per kWh and published data. An estimate made by the International Energy Agency (IEA) two years ago said that the cost per kilowatt-hour of batteries in 2020 will be US$300/kWh. The study found that market leaders Tesla and Nissan Motors have already reached this milestone late last year.
And things are bound to get even better. The reduction in Lithium Ion battery cost was found to be between 6 to 9% for every cumulative doubling of production, in line with previous studies. This means with the massive adoption of Lithium ion batteries in the car industry, we will see the cumulative doubling of production accelerate tremendously, resulting in huge drops in prices.
As it is, the cost of market leaders is already way lower than reported previously. As Panasonic co-locates in Tesla’s Gigafactory in Nevada, we can see even more collaboration that would accelerate the learning curve, take advantage of economies of scale, and result in even more price drops.
We hope that this happens sooner, than later. Costs need to drop to less than US$150/kWh to see better adoption in the US, and to US$100/kWh for EVs to achieve cost parity with their internal-combustion counterparts.
But then, hope springs eternal. With the Gigafactory opening in 2016 and Volkswagen making the push for solid state batteries, we will probably see even more exciting developments in battery electric vehicle technology in the next few months.