Electric vehicles aren’t exactly cheap to purchase, and one of the main factors in determining EV price is the cost of the battery packs. The cost of EV batteries, however, is good news — according to a new report from Pike Research (a cleantech marketing and research firm), installed lithium ion battery cost is expected to fall by about a third over the next five years.
If You Build It, They Will Come (Sometimes)
The main driving force for the lithium-ion battery market is, of course, the rising tide of electric vehicles and plug-in hybrids. As gas prices increase, the EVs available improve, and as carbon emissions become more strictly regulated, electric vehicles are expected to slowly reshape the automotive industry and market. Improving battery technology and bringing down battery cost will do much to address the two main issues consumers have stated with EVs (range and vehicle cost, namely).
Research director John Gartner concluded that the market for lithium batteries would grow seven-fold in size — from $2 billion annually to $14.6 billion annually — to match pace with the expected growing popularity of electric and hybrid vehicles. In his words:
“The market for Li-ion batteries will be driven primarily by plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs), which require much larger battery packs than hybrids. Battery chemistries that prioritize energy capacity over power density can satisfy both the PHEV and EV battery segments, enabling vendors to offer products to multiple vendors for multiple models. Reducing the installed price of EV batteries to $523 per kilowatt hour in 2017 will be a critical step towards making PEVs cost-competitive with petroleum-powered vehicles.”
Keep Improving the Mousetrap
Current lithium-ion battery technology gives most battery electric vehicles a range of 30-100 miles (depending on make, model, and size of both the vehicle and the battery pack). Although the average American driver goes no more than sixty miles a day, range anxiety — the fear of ending up without power and unable to charge the car to get home — is a popular concern. Also worrisome to many drivers is the lack of a charging infrastructure.
Battery makers, on the other hand, are faced with the challenges of high energy density, safety and the public perception thereof, and the charge/discharge rates. Various types of batteries are available, but none of them have everything (yet).
Pike Research’s report, Electric Vehicle Batteries, can be downloaded from their website. It also outlines governmental roles around the world in supporting the EV market, as well as key market drivers in the spread of electric vehicles.
Comments or questions? Let us know below.
Source: Business Wire | Image: Wikimedia Commons
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