Real Electric Car Battery Costs Remain Elusive
Recent reports about the declining cost of electric car batteries raise as many questions as they answer. According to a report from Bloomberg News last week, EV battery costs fell to $689 per kilowatt-hour during the first quarter of this year, down from $800/kWh a year earlier. It wasn’t clear from the report if that cost is for cells, all components and software—or a total installed cost. Any quoted price per kilowatt-hour can be partial and hide costs that produce a misleading figure in either direction.
The relatively high cost of lithium ion battery packs are often cited as the biggest obstacle to mass adoption of electric cars and plug-in hybrids.
This week, the UK Committee on Climate Change issued a study (PDF) claiming that costs for lithium-ion automotive batteries currently come in at approximately $800 per kWh—translating the pack cost of a 93-mile-range EV (like the Nissan LEAF) to about $21,000.
The $800/kWh cost is for the whole battery system (although presumably not for installation). While the tone of the report is cautionary, stating that there are no big battery breakthroughs anticipated before 2020, the UK study says that by 2030, prices are predicted to drop to $6,400 for an electric range of about 155 miles.
In other words, that’s a three-fold price reduction, while adding 66 percent more range. (Sounds breakthrough-ish to me.) Of course, carmakers could conceivably choose to leave the range at 100 or so miles, and reduce the cost of a pack even further.
One could assume that the cost-per-kWh will occur in a stepped fashion between now and 2030, so that by 2020, the price of a pack for a car like the Nissan LEAF or Ford Focus Electric will be somewhere between where it is now, and a one-third slash while gaining two-thirds more energy storage.
My colleagues at Pike Research target $523 per kWh as a target price at which plug-in electric vehicle take a step toward being competitive with petro-powered cars, a level that could happen by 2017. The U.S. Advanced Battery Consortium pegs $150 per-kWh as the competitive price point.
Confusion about current prices—or future costs to make EVs competitive—are exacerbated by comments from auto executives who claim they have already greatly reduced battery costs. Last week, in the Wall Street Journal, Ford’s Alan Mulally said the 23-kWh pack in the Focus Electric costs “around between $12,000 and $15,000 apiece.” That puts the dollar-per-kWh price between $520 and $650. In 2010, Nissan stated that a LEAF’s pack costs about $9,000—or $375 for the 24-kWh pack. During Tesla’s fourth quarter 2011 financial results conference call in February, CEO Elon Musk said, “"I do think that cost per kilowatt at the cell level will decline below that, below $200, in the not-too-distant future."
I suspect that numbers will continue to get tossed around—low figures from automakers and high numbers from analysts. But the reality of what EV battery packs really cost any specific automaker will remain a tightly guarded secret.
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