Falling prices for battery packs may cause a surge in electric car sales

Falling prices for battery packs may cause a surge in electric car sales
Data are from multiple types of sources and trace both reported cost for the industry and costs for market-leading manufactures. If costs reach US$150 per kWh this is commonly considered as the point of commercialization of BEV. Credit: Björn Nykvist & Måns Nilsson, Nature Climate Change 5, 329–332 (2015) doi:10.1038/nclimate2564

A pair of researchers affiliated with the Stockholm Environment Institute has found that prices for battery packs in electric cars have been falling more than has been reported. In their paper published in Nature Climate Change, Björn Nykvist and Måns Nilsson describe a study they carried out to determine the cost of battery packs for EV's and what they learned by doing so.

As Nykvist and Nilsson point out, sales of cars with electric motors have not been able to compete with those based on gasoline engines—the high price of the battery pack has relegated such vehicles to elite status, which only the well-off can afford. But, they claim, after conducting a study which involved garnering price information from 80 different sources (the majority of electric car makers do not divulge the cost of the ), they found that average cost estimates for was US$1000 per kWh back in 2007. But their latest figures show that the cost has dropped to just US$300 per kWh, which they say, is approaching the cost of running a gasoline powered vehicle. They suggest that if continue to fall at the same rate (about 8 percent per year), they could reach US$150 per kWh over the next decade, which they say would make such cars cost competitive (depending on oil prices, of course)—and that they add, could have a major impact on the climate.

The report by Nykvist and Nilsson shows prices for battery packs below what industry analysts have been predicting—with current prices at levels many have suggested would not be seen until 2020. They also note that some makers such as Tesla, and Nissan have been ramping up production which could lead to economies of scale, further reducing . That will leave EV makers with two options—lower the price on their vehicles, or add more distance to their cars. Of course, some makers could choose to split the difference, offering intermediate buyers an attractive option.

In their study the research pair detailed how they used price estimates from a variety of sources to come up with their averages; from statements made public be EV makers, to news reports, research papers and other documents published by governments, academics and businesses. They believe it all means that EVs will become cost competitive far sooner than many have predicted.


Explore further

Low gas prices, incentives change math for electric cars

More information: Rapidly falling costs of battery packs for electric vehicles, Nature Climate Change 5, 329–332 (2015) DOI: 10.1038/nclimate2564

Abstract
To properly evaluate the prospects for commercially competitive battery electric vehicles (BEV) one must have accurate information on current and predicted cost of battery packs. The literature reveals that costs are coming down, but with large uncertainties on past, current and future costs of the dominating Li-ion technology. This paper presents an original systematic review, analysing over 80 different estimates reported 2007–2014 to systematically trace the costs of Li-ion battery packs for BEV manufacturers. We show that industry-wide cost estimates declined by approximately 14% annually between 2007 and 2014, from above US$1,000 per kWh to around US$410 per kWh, and that the cost of battery packs used by market-leading BEV manufacturers are even lower, at US$300 per kWh, and has declined by 8% annually. Learning rate, the cost reduction following a cumulative doubling of production, is found to be between 6 and 9%, in line with earlier studies on vehicle battery technology. We reveal that the costs of Li-ion battery packs continue to decline and that the costs among market leaders are much lower than previously reported. This has significant implications for the assumptions used when modelling future energy and transport systems and permits an optimistic outlook for BEVs contributing to low-carbon transport.

Journal information: Nature Climate Change

© 2015 Tech Xplore

Citation: Falling prices for battery packs may cause a surge in electric car sales (2015, April 6) retrieved 16 July 2019 from https://techxplore.com/news/2015-04-falling-prices-battery-surge-electric.html
This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no part may be reproduced without the written permission. The content is provided for information purposes only.
221 shares

Feedback to editors

User comments

KBK
Apr 06, 2015
The biggest problem by far... and it far outweighs the pollution of all land vehicles in the world is: BUNKER FUEL, used by OCEAN CARGO CARRIERS.

The pollution they put out, it outweighs that of land vehicles, by a minimum of 10 to 1.

That's right, look into it and do the math, it's as straightforward as it can possibly be.

Ocean going cargo vessels pollute more than all land vehicles by a minimum of 1,000 percent.

We can clean up the bunker fuel pollutant levels easily, far more easily than that of land vehicle pollution.

This is such an obvious issue in comparison to cars and trucks, and it makes you wonder what the heck is going on when this bunker fuel issue has never been raised or spoken about.

Apr 06, 2015
Great news.

There is a caveat though. The up-front cost of batteries per kWh isn't indicative of the full price, because different batteries last a different number of cycles and years. Cheap low quality batteries cost less, but need to be replaced more often.

Apr 06, 2015
No thanks, I don't need a golf cart.

Apr 06, 2015
This is such an obvious issue in comparison to cars and trucks, and it makes you wonder what the heck is going on when this bunker fuel issue has never been raised or spoken about.


Maybe you haven't been looking? The EU and some US states like California already ban high sulfur heavy fuel oils in shipping in their ports.

Unfortunately there's no common agreement over pollution limits in international waters.


Apr 06, 2015
No thanks, I don't need a golf cart.


Of course you do, would suit your clown nose and crusty hair brilliantly, on the other hand sensible people would love to drive electric cars that accelerates almost as fast as a motorbike (and that has already been done) No more bulky gass guzzlers required upfront, Electrics is here to take over and in future, they will dominate and revlutionize travel.

Apr 06, 2015
Calling this: https://www.youtu...LgF1uLB8 a golf cart is calling the Saturn V a bottle rocket.

Apr 06, 2015
"they found that average cost estimates for lithium-ion batteries (cells) was US$1000 per kWh back in 2007. But their latest figures show that the cost has dropped to just US$300 per kWh"

According to Navigant Research Tesla was paying Panasonic $180/kwh for cells last October.

http://renewecono...wh-19365

Expect another 30% price drop when the GigaFactory is running. That means just under $130/kWh and at a price where a 200 mile range EV purchase price gets very close to ICEV purchase price.

Paid $3,600 for my first hard drive. 30 MB.
Now one can get TBs for $100.

Apr 06, 2015
"they found that average cost estimates for lithium-ion batteries (cells) was US$1000 per kWh back in 2007. But their latest figures show that the cost has dropped to just US$300 per kWh"

According to Navigant Research Tesla was paying Panasonic $180/kwh for cells last October.

http://renewecono...wh-19365

Expect another 30% price drop when the GigaFactory is running. That means just under $130/kWh and at a price where a 200 mile range EV purchase price gets very close to ICEV purchase price.

Paid $3,600 for my first hard drive. 30 MB.
Now one can get TBs for $100.


But now the Earth hates us...was it worth it?

LOL

Apr 06, 2015
Battery prices is just one part of the electric vehicle issue. Range limitations and lack of rapid charging infrastructure are sources of consumer reluctance to make the switch.

The recent large drop in oil prices doesn't help the case for battery powered cars. While I have nothing against electric vehicles, I can't see myself buying one in the next 10 years.

Apr 06, 2015
What if you were in the market for a new car 5-10 years from now and found yourself in your preferred brand dealer's showroom looking at two versions of the same model that are priced the same, one a ICEV and one a 200 mile range EV?

Suppose there were 'Superchargers' all along major travel routes so that you could drive 500 miles/ 800 km and get there almost as fast as someone driving the ICEV version. But you'd drive for far less per mile.

Suppose buying the EV would mean that you wouldn't have to go to a filling station a few dozen times a year and could skip oil change type stuff. And you'd save $1k to $2k a year in fuel/oil change costs.

Suppose you'd have faster acceleration and a smoother and quieter ride with the EV.

That's where we're headed. I expect that's the choice we'll have within ten years. It's all about battery costs.

Apr 07, 2015
Suppose there were 'Superchargers' all along major travel routes so that you could drive 500 miles/ 800 km and get there almost as fast as someone driving the ICEV version. But you'd drive for far less per mile.

Suppose buying the EV would mean that you wouldn't have to go to a filling station a few dozen times a year and could skip oil change type stuff. And you'd save $1k to $2k a year in fuel/oil change costs.


I very much doubt that will happen in the next ten years, because the grid will have supply problems to a large number of quick-charge stations.

And your cost comparison figures are a bit off. At $150/kWh - assuming equal performance - the cost of the battery is just below the cost of fuel. You don't save $1-2k a year - you match the ICEV in fuel costs.

Then there's the cost of electricity, and the cost of the L2 charger units and utility bills to upgrade your breakers for higher amperage service which easily match those "oil change" costs.

Apr 07, 2015
And when you're calculating cost per mile, you have to take into account the depreciation in value of a car with half the useful lifespan of an ICEV because there are no suitable batteries that last 20 years - or the full life of a car.

Suppose a a 200 mile EV with a battery using Tesla/Panasonic NCA cells. It's designed for 8 years or 100,000 miles. At 380 Wh per mile you need 76 kWh which at $150/kWh would cost you $11,400

So, by about year 10 you have to drop an additional ~$12k into the car, or if not you then anyone who buys it off of you. That means nobody in their right mind would buy such a car second hand. Once the battery goes the whole thing is effectively scrap metal.

If you do buy a replacement battery, you're married to a 10+ year old car that is slowly breaking to pieces, yet you have to drive it the next 10 years to get the full value out.

Apr 07, 2015
When buying a car, a good financial advice is the 10% rule. Don't buy a car that costs more than 10% of your income. At the US median income of $42k a year, that means you shouldn't consider a car for more than $4,200 if you want to keep yourself safely out of poverty and debt. If you have a car that cost more than 25% of your income, sell it and buy a cheaper one, or be prepared to drive it for a very long time to make up for the cost.

That is the ultimate problem with EVs. Most people cannot actually afford new cars, and with no second hand market below the $10k mark, more than half the people can never own an EV.

Apr 07, 2015
At this point we really don't know how long EV batteries will last. 100k, 8 years is based mostly on warranty, not real world data.

The Ford F150 gets a 3 yr/36,000 mi basic, 5 yr/60,000 mi powertrain warranty. Replace the powertrain at 60.1k? No one expects that.

The EVs most of us will drive are more likely to have ~50 kWh battery packs (Tesla Mod3, Chevy Bolt type cars). Replacing the battery might cost (using your number) $7,500. Dropping in a fresh battery will make that car drive like new.

It makes no sense that an EV with a body and interior in good shape would be crushed simply because it was battery time. The car may have very low resale price, but a fresh battery makes it ready to go for a second lifetime.

It may mean that 2nd and 3rd owners pay more than they would for a used ICEV, but they are getting a much more dependable vehicle and saving a bundle on fuel costs. If you're saving a couple thou a year on fuel, oil changes, and repairs ....


Apr 07, 2015
... because the grid will have supply problems to a large number of quick-charge stations.

... the cost of the battery is just below the cost of fuel. You don't save $1-2k a year - you match the ICEV in fuel costs.

Then there's the cost of electricity, and the cost of the L2 charger units and utility bills to upgrade your breakers for higher amperage service which easily match those "oil change" costs.


The grid will adapt and abide. Ten years is a very long time.

Battery cost is part of vehicle cost. Battery cost should drop below ICE cost. Same-model EVs are expected to be less expensive than ICEVs.

35 MPG @ 3.50/gallon = $0.10/mile
0.3 kWh/mile @ $0.10/kWh = $0.03/mile

The average cost to have a 240 vac outlet (electric dryer) installed is $250. That is a one time cost. About half of all drivers will be able to use an existing 110 vac outlet.

Apr 07, 2015
We are quibbling about the fine points here. The trend is established and probably cannot be stopped.

Apr 12, 2015
Battery cost learning curve is at a rate of about 16%/yr, projecting down to about $150/KwHr. Current replacement costs will decline and we should not forget the used battery market from totaled vehicles. Most vehicles get totaled when the front end is crashed leaving parts for salvage.

Apr 12, 2015
Dropping in a fresh battery will make that car drive like new.


Except for the shocks, brakes, springs, wheel alignment, joints... a 10-15 year old car is an old car with old car problems that are completely unrelated to the battery.

$250. That is a one time cost.


We're not talking of the socket alone. Utilities typically charge you a monthly service fee based on the amperage of your main breakers. This may vary regionally, but installing a new high current outlet typically requires you to upgrade your whole contract and that can run up to thousands more.

We are quibbling about the fine points here. The trend is established and probably cannot be stopped.


True. The question is when.

Apr 12, 2015
The grid will adapt and abide. Ten years is a very long time.


At the grid scale, 10 years is a short time. We're talking about power surges reaching to gigawatts. It's going to add problems on top of problems with the simultaneous expansion of renewable energy.

The predictable consequence of simultaneous increase in renewables and electric cars is that battery cell demand rises faster than supply, which puts a stop to the falling prices. They both need cheap batteries because the grid can't handle electric cars or the renewables without, much less both at the same time.

we should not forget the used battery market from totaled vehicles


That may not come to. Remember the GM Volt case where the crash-tested cars caught fire two weeks afterwards in storage because of hidden damage in the battery pack? Crashed packs probably need to be rebuilt.

Apr 12, 2015
Yeah, I also had a Ford Pinto.

Apr 12, 2015
"Utilities typically charge you a monthly service fee based on the amperage of your main breakers."

That must be a European thing? Never heard of it before in the US.

" We're talking about power surges reaching to gigawatts."

Have you seen a typical day demand curve? People get up in the morning and demand soars. Grids abide.

"battery cell demand rises faster than supply"

Battery companies can do math. They will watch demand changes and pre-adjust. The large battery companies are already building new capacity in anticipation of sales increases.

"because of hidden damage in the battery pack? "

When wrecked ICEVs are hauled to storage lots their gas tanks are drained. When wrecked EVs are hauled to storage lots their batteries will need to be disconnected. Before use battery packs will need to be checked for damage.

"10-15 year old car is an old car with old car problems that are completely unrelated to the battery"

New shocks are maintenance.


Apr 12, 2015
As Plant Engineer for a foundry, I had to carefully manage the operation of our 3.5 Megawatts of electric furnace to avoid the crippling demand charges, but those are only for very large customers. The demand charge exceeded the energy costs.

We have no demand charges for residential customers.

Apr 12, 2015
Topic: "Falling prices for battery packs"

Gkams comment: "As Plant Engineer for a foundry..."
-which is only the least bit relevant in his mind.

By "Plant Engineer" - you dont mean 'boiler operator' do you george? How long did that job last?

Apr 12, 2015
As the number of EVs increase they can become valuable dispatchable loads for grid operators. The average EV will need to charge less than three hours a day and most cars are parked 90% of the time.

Grids should be very happy to let drivers set a 'daily minimum miles' and leave it up to the grid to decide exactly when charging takes place. Arrive at work/home and plug in, knowing you will have your 50, 100, whatever mile minimum by your scheduled departure time.

Grids can then use charging as load they can turn on and turn off in order to help match supply to demand. That will lower storage needs.

During times of low wind/solar EVs can be charged only to their set minimum and fully charged when supplies are high. Another storage savings.

Apr 12, 2015
BMW and PG&E are already reportedly working on a system for that using their i3.

Apr 12, 2015
otto - get over it. I am real, and you are somebody hiding behind a pseudonym admittedly playing "games". You would not know an Inductotherm from a Thermador.

me - real person

you - cowardly sniper

Apr 12, 2015
"otto - get over it. I am real, and you are somebody hiding behind a pseudonym admittedly playing "games". You would not know an Inductotherm from a Thermador.

me - real person

you - cowardly sniper"

-Ok so explain what your being a REAL boiler operator in a foundry has to do with battery packs and electric cars. And why you would feel the need to brag about it. And why anyone here would give a shit.

Apr 12, 2015
You idiot, foundries do not have boilers. otto, you REALLY are totally ignorant of the world!

You thought my job as Integrated Circuit Test Engineer using computer-operated manufacturing was exactly like my experience in the iron foundry with electric induction furnaces and cupolas.

You thought they were both like a City Engineer. Hilarious!

ps - did you look up Inductotherm and Thermador?

Apr 12, 2015
"You thought my job as Integrated Circuit Test Engineer using computer-operated manufacturing was exactly like my experience in the iron foundry with electric induction furnaces and cupolas"

-Well I do admit it does sound like a very fancy boiler indeed. But you sat in a control room and pushed buttons and every once in awhile you got up, went out with your oiler can, twisted some wheels, yanked some levers, and tapped some gauges. Right?

This is what all boiler/foundry/plant engineers do, generically-speaking. So how does this make you an engineer? Some engineers drive trains did you know it?

Of course none of that has anything to do with the topic or what you know about it... but everything to do with your compulsion to bullshit.

"Inductotherm and Thermador"

-And you should quit dropping tech terms as you've usually proven to be ignorant of what they mean.

Apr 12, 2015
Boilers in foundries??? I really love it when you broadcast your ignorance.

Apr 12, 2015
It is probably time for another pseudonym, otto. You bragged about your stable of phony identities, and you have really ruined this one. Everybody hates you for your filthy mouth and the inability to discuss issues.

I know, . . . call yourself wikotto!

Or Sergeant Neverwuz.

Apr 12, 2015
When EVs are cost-competitive, they will rule in the marketplace. They're faster, better accelerating, quieter, lighter, better handling, cheaper to maintain, and they don't make stinky exhaust. Plus, people can pat themselves on the back for helping save the environment. And they're already a status item.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more