Being the most expensive part of electric vehicles, batteries are the key to the affordability of green vehicles, and the latter’s sales and technological trends. In the past few years, lithium-ion batteries were decreasing at a fast rate, averaging 12 percent per year, making the mass production of green vehicles cheaper.
However, the South Korean automaker Hyundai Motor has recently expressed their projection that this decline in battery prices that helped the electric vehicle technology grow rapidly will eventually reach a plateau, probably starting the year 2020.
The expected trend is attributed to the limited supply of electric vehicle battery’s main raw materials such as cobalt, nickel, and lithium. The demand for these precious metals is forecasted to climb in the coming years due to the increasing interest in low-emission vehicles for meeting climate goals.
“Not a single ingredient is going in a positive direction in terms of pricing,” said Lee Ki-sang, Hyundai Motor’s senior vice president. “So far battery prices have been declining at a rapid pace, but the pace will moderate significantly or maintain the status quo by 2020.”
Amidst the wild race of other automakers to come up with technological advances that can offer the best electric vehicle to customers, Hyundai Motor has entered the scene late, according to some analysts. For instance, its plan to release a long-range vehicle next year only shows that it is far behind Tesla and General Motors.
Regardless of Lee’s stance on battery prices, Hyundai Motor and its smaller affiliate Kia, commit to launching 38 green vehicle models by 2025 using a range of different technologies, according to him.
Hyundai has recognized the necessity of developing batteries internally, but still, it will depend on external suppliers for the reason that it lacks the capability of securing the main raw materials.
Hyundai targets to launch by 2020 vehicles that are powered by solid-state lithium batteries, have longer range, and are much safer than the current vehicles ran by lithium-ion batteries. The automaker is also planning to work with Fiat Chrysler Automobiles to develop hydrogen fuel cell cars.