EV Battery Prices: Looking Back A Few Years, & Forward Yet Again

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I spent a couple of hours last night updating our main electric car page (and also the one on EV Obsession that includes European cars but not battery & environmental discussions). While in there, I was reminded of EV battery prices, price changes, and price projections from several years ago, which jumped out at me as an awesome article topic!

From that page, here’s the updated text:

The upfront price tag of EVs and PHEVs is higher than that of similarly sized and equipped gasoline-powered cars, mostly because batteries are expensive. How expensive? That’s hard to know, because car manufacturers generally won’t say what they are paying for their batteries, or what they expect to pay in 1 year, 2 years, 3 years, etc. Here are some of the best answers we’ve got for now regarding EV battery prices for specific models:

→ Tesla’s battery packs were estimated to cost $240/kWh in 2014, while the rest of the industry was projected to be no lower than $400/kWh (that seems dubious). But the latest figure from a Tesla representative pegs its battery pack cost at under $190/kWh. (Note that CEO and Chairman Elon Musk stated in February 2012 that the cost of EV batteries would drop below $200 per kWh in the “not-too-distant future.”)

→ GM has a contract with LG Chem to get battery cells for $145/kWh, which probably translates into a battery pack cost around $190/kWh as well.

Bloomberg New Energy Finance Battery Price Estimates

For some historical background, though, here’s some info from a 2012 BNEF report that found that the average price of batteries used in electric vehicles dropped 14% from Q1 2011 to Q1 2012, and 30% from 2009 to 2012 (I didn’t even realize/remember that I have been writing about EV battery prices for this long!):

“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.”

A more recent BNEF study found that EV battery prices fell 35% in 2015. It stated that prices fell 65% since 2010, but it estimated battery pack prices at $350/kWh, which is considerably higher than the Tesla/Panasonic & GM/LG Chem estimates.

US Department of Energy Aims & Estimates

For another broad view, here’s a statement from US Secretary of Energy Steven Chu, from back in January 2012, on battery costs (emphasis mine):

“Overall, the Department of Energy is partnering with industry to reduce the manufacturing cost of advanced batteries. While a typical battery for a plug-in hybrid electric vehicle with a 40-mile electric range cost $12,000 in 2008, we’re on track to demonstrate technology by 2015 that would reduce the cost to $3,600. And last year, we set a goal of demonstrating technology by 2020 that would further reduce the cost to $1,500 – an accomplishment that could help spur the mass-market adoption of electric vehicles.”

It’s 2016, and it seems EV battery prices have fallen faster than projected. The DOE at that time was targeting $300 per kWh in 2015 (the $3,600 packs) and $125 per kWh by 2022.

Battery Price Projections Consistently Too High

Lastly, a 2014 study found that EV battery prices were falling much faster than most forecasts anticipated. Here’s a chart from that report:

Looking at that chart, it seems that Tesla/Panasonic and GM/LG Chem battery costs are already (in 2016) down to the lowest projections for 2020. Will we achieve $100/kWh by 2020?

Overall, we have been seeing something I’ve presented about in Mumbai, India; Vancouver, Canada; Cocoa, Florida, USA; and  Berlin, Germany: once a technology is ripe, it takes over the market quicker than anticipated and costs come down faster than most people anticipated. Check out these three presentations for more on that (if you haven’t already done so):

Let me know if I’m missing anything big here or you have more thoughts/data on this topic.

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