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EV Battery Prices Fell 14% in Last Year

The average price of batteries used in electric vehicles has dropped 14% in the last year (Q1 2012 compared to Q1 2011) with manufacturing up considerably. The average price of an EV battery is now $689 per kilowatt hour, compared to $800 per kilowatt hour in 2011, according to a new Bloomberg New Energy Finance (BNEF) report.

Compared to 2009, prices are down approximately 30%. By 2030, BNEF projects battery prices will fall to $150/kWh (in 2012 dollars).

“Electric vehicles such as the Mitsubishi Motor iMiEV, Nissan Leaf or Tesla Model S require between 16 and 85kWh of storage, with a total cost of $11,200 and $34,000, or around 25% of the total cost of the vehicle,” BNEF notes. “Battery pack prices for plug-in hybrid vehicles such as GM’s Volt are on average 67% higher in terms of $/kWh, than those for electric-only vehicles like Nissan’s Leaf. This higher price is mainly due to the greater power-to-energy performance required for plug-in hybrid vehicles.”

Part of the recent cost drops is due to manufacturing supply chain cost reductions, but the main part of the drop is simply due to increased supply relative to demand.

“As reported last year by Bloomberg New Energy Finance, current production capacity for electric vehicle battery packs outstrips demand by over 10GWh, equivalent to around 400,000 pure battery electric vehicles, and the gap is on course to widen to 17GWh by the end of 2013. By comparison, the total number of electric vehicles sold in 2011 was 43,237.”

While this mismatch results in lower profit margins for EV battery companies, it is considered good for the EV industry as a whole and consumer adoption.

“Batteries are one of the biggest drivers of the cost of electric vehicles, and hence of their uptake,” Michael Liebreich, chief executive of Bloomberg New Energy Finance, commented. “A sharp decline in price may be unwelcome for battery manufacturers, but it is essential for the long-term health of the sector. Battery prices will be one of the key pieces of data for investors, policy-makers and the car industry to watch over the next few years, and that is why we have launched this index.”

Source: Bloomberg New Energy Finance
Image: Electric vehicle charging via Shutterstock


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Written By

Zach is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA], NIO [NIO], Xpeng [XPEV], Ford [F], Amazon [AMZN], Piedmont Lithium [PLL], Lithium Americas [LAC], and Starbucks [SBUX]. But he does not offer (explicitly or implicitly) investment advice of any sort.

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