Lithium-ion battery price drop to make hybrids, EVs cheaper | CarAdvice

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Lithium-ion battery price drop to make hybrids, EVs cheaper

By Tim Beissmann
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Hybrid and electric vehicles are set to become considerably cheaper in the coming years with the price of automotive lithium-ion batteries tipped to drop two-thirds by 2020.

US-based business analyst McKinsey believes the price of lithium-ion batteries will fall from their current level of US$500-US$600 ($474-$568) per kilowatt hour (kWh) to US$200 ($189) per kWh by 2020, before dipping even further to approximately US$160 ($152) per kWh by 2025.

According to McKinsey’s data, the 24kWh lithium-ion battery pack in the Nissan Leaf currently costs up to $13,632. By 2020, the price is tipped to drop to as low as $4544, while by 2025 the same battery could cost as little as $3648 (not accounting for inflation).

Likewise, the 16.5kWh battery in the upcoming Holden Volt costs as much as $9372 today, but should fall to $3124 by 2020 and $2508 by 2025.

McKinsey’s report says almost 30 per cent of the savings will be achieved through improved economies of scale as battery demand increases, as well as through standardised manufacturing equipment and streamlined production processes. It says majority of these savings can be achieved within the next three years.

Lower component prices are set to account for roughly one-quarter of the savings between now and 2020, and advancements in anode, cathode and electrolyte technology are expected to account for the remaining 45 per cent of the savings, while also potentially doubling the batteries’ capacity leading to extended driving ranges.


 

  • DZ

    So that would reduce the price by what, 10% ? The Leaf would still be a very expensive circa $50k. matchbox toy.

  • Basil Exposition

    My life is too boring… I need some range anxiety to spark things up.

  • BrianKeez

    This is good news, but I believe that prices will drop more quickly as the large battery market is used as stationary storage to reduce utility demand charges.

    After 11 months and 24,000 miles of NO range anxiety in my 5-seat, all electric Nissan LEAF, I will be happy to pay a couple hundred bucks every few years to replace one of the 48 battery cells as they lose capacity.

    • Norm

      Good to hear from an actual EV owner and not the fear mongers.

      It’s a relief to know that EV owners don’t get in their car every day and go…Oh My God! I’m so anxious!?

  • Gan Tan

    Bad news for the environment.Those Lithium Ion Batteries are horrendously toxic.

    • Guest

      What’s your solution then? How are you going to implement it? Is there the infrastructure to support it? Why would it be better than what’s on offer now? What is your target pricing? How will you achieve this price?

    • Ben

      Do some reading before you blurt out such ignorant rubbish. Your statement is just plain wrong, and that’s without the added benefit of the ease of recycling these materials.

    • lazyboneslewis

      True, but i wouldn’t recommend drinking or sniffing Petrol either. And you don’t often hear of massive Lithium Ion spills in the ocean wreaking beaches and marine life.

  • Valentinoent

    I read user comments all the time about electric cars.  The negative comments about electric cars are almost always embedded in this cultural lethargy of “That won’t work” mindset.  Some people hate change so much they think their opinion outweighs fact.  Pathetic but TRUE.  Electric cars will be a part of our solution but maybe not the whole solution.  We need competition in fuels not just in gas companies.  Once competition begins, innovation takes over.  Your car will eventually be the new PC and do more than have you travel.

    The future is bright for cars as you get these hold guys from car companies out and retired them to an island, and put in younger decision makers who really do care and actually see a future.

    Think positive.