Published on December 18th, 2017 | by James Ayre0
Hyundai Exec: EV Battery Prices To Level Off Around 2020 Owing To Supply Constraints
December 18th, 2017 by James Ayre
While some auto manufacturers are apparently banking on the idea that electric vehicle battery prices will continue their recent price-decrease trend for quite some time to come, executives at Hyundai are expecting battery prices to level off around 2020 owing to component supply constraints, reportedly.
In other words, Hyundai execs are expecting the growth of the electric vehicle (EV) industry to result in increasing demand for key commodities (cobalt, lithium, nickel, etc.) and thus to result in a battery prices ceasing to drop in price around the ~2020 timeframe.
Such a scenario would mark quite a shift from the trend of recent years — one where lithium-ion battery cells for electric vehicles prices have fallen by around 60% over the last half decade.
“Not a single ingredient is going in a positive direction in terms of pricing,” stated Hyundai Motor Senior Vice-President Lee Ki-sang — the head of Hyundai’s electric car operations. “So far battery prices have been declining at a rapid pace, but the pace will moderate significantly or maintain the status quo by 2020.”
Notably, Hyundai execs are apparently working to release electric vehicles utilizing solid-state lithium batteries by around 2020, no doubt with the aforementioned in mind — that’s roughly the same timeframe regarding solid-state batteries as Toyota execs and BMW execs are working on.
This hype about battery component supply constraints and rising prices is something Germany’s largest auto industry association, BDI, recently contributed to. The response we got from the head energy storage analyst at Bloomberg New Energy Finance (BNEF), Logan Goldie-Scot, was as follows:
“Funnily enough I am currently in Shanghai speaking about this very topic. It’s clear that rapidly increasing battery demand is putting pressure on the lithium-ion supply chain. Despite mining companies gearing up production, based on current expected production there may be shortfalls in supply leading up to 2030. However, in areas where production capacity will not be sufficient, it is more likely that market price signals will galvanize large and small miners to open new mines and facilities. For lithium in particular though, contracts are typically done on a bilateral basis between companies so some could miss out if they underestimate demand or are unable to agree an offtake agreement.”
Among the 162 comments under that article, there were a lot of good ones, but I’ll highlight just this pointed one here from Tanstaafl:
“For those carmakers that are intend to be a master of their own future and plan the transition to RE cars, there is no problem.
“Those that gamble that they will be able to buy on the spot market will have production challenges because of raw materials and parts shortages. But that is nothing new.”
Regarding the Hyundai comments, Reuters provides more: “Despite its cautious outlook, the South Korean carmaker and smaller affiliate Kia Motors Corp planned to release 38 green models using a variety of technologies by 2025. … Lee said that although Hyundai Motor saw the need to develop batteries in-house, it still relied on outside suppliers due to a lack of economies of scale to secure raw materials.”
Also worth noting here is that Hyundai is apparently working in some capacity or another with Fiat Chrysler Automobiles on the development of hydrogen fuel-cell vehicles…
Other recent Hyundai news includes plans to build the world’s largest grid storage battery, the IONIQ winning “Green Car of the Year” in the 2017 Professional Driver Car of the Year Awards as well as “Women’s World Car Of The Year,” and Hyundai launching its first fully electric carsharing program (in Amsterdam).
Photos by Kyle Field | CleanTechnica