27 °C Singapore, SG
February 22, 2024
Latest News
Corio Generation and bp Alternative Energy Investment Ltd invest in South Korea Australia missing climate targets Advocating for US based offshore wind Broken Record, Temperatures hit new highs, yet world fails to cut emissions (again) Toshiba and GE to shore up Japanese offshore wind domestic supply chain How I got here… National University of Singapore green finance academic Sumit Agarwal Multi-billion-dollar renewables project earmarked for Yindjibarndi native title land Smart Energy Finances: Enel divests 50% of Australian renewable operations to Japanese oil and gas giant Critical minerals investments surged by 30% finds IEA Kung Fu nuns fight climate change One of Southeast Asia’s largest energy storage systems comes online Why turning waste into gas will add value to this Indigenous economy Renewable energy records tumble around Australia as rooftop solar power soars Topsoe supports SGP BioEnergy in renewable fuels production in Panama ‘Poor tropical regions’ suffer greatest economic damage from worsening heatwaves UNEP: Meeting global climate goals now requires ‘rapid transformation of societies’ Analysis: Africa’s unreported extreme weather in 2022 and climate change Partly wind-powered coal ship sails into Newcastle New fossil fuels ‘incompatible’ with 1.5C goal, comprehensive analysis finds Australian offshore wind ‘supercharged’ in Victoria as billions pledged to fast-track projects Goldwind turbine ‘breaks world record for largest rotor diameter’, Chinese media reports BW Ideol to work with developer Taiya on Taiwan floating wind pilot US to boost floating wind power Wind Power in South Korea – an overview GS E&C to develop bioethanol using cassava waste Korean business group has asked the US to make exceptions for Korean EV’s in Inflation Reduction Act Equinor’s Australian offshore wind debut Global energy transition stalls – 2022 Global Status Report in pictures India’s ReNew Power secures $1bn loan for gigascale 24/7 wind-solar-battery project POSCO International to merge with POSCO Energy

EV Battery Packs ~50% Cheaper Than In 2016

Batteries

Published on December 14th, 2020 | by Zachary Shahan

December 14th, 2020 by


The tough thing about analyzing what is happening in the electric vehicle industry is that we tend to be static thinkers — we see how things look today and it is hard for us to see that they can change dramatically. This is even more so the case when what we see today is also more or less what we’ve seen for decades while what is coming tomorrow is dramatically different.

This is one big reason analysts and Wall Street got Tesla so wrong for so long — it was too hard to see and believe where Tesla was headed.

But Tesla isn’t the only company riding the technology improvement wave we’re on right now. Indeed, as I’ve pointed out, while Tesla was improving the Model S by leaps and bounds and bringing the lower-cost, significantly improved Model 3 to market, even Nissan was scaling mountains — tripling the range of a LEAF within a decade.

Every automaker that has been producing electric vehicles for a handful of years has an EV on the market now that has oodles more range than their EVs from 2011, 2013, or 2015.

In fact, a graph from the International Energy Agency (IEA) that I recently discovered shows the essence of what has happened, of what has pulled electric cars across the market from the 3rd division to the 1st division (to use a sports metaphor that is wholly inappropriate here).

You can explore the interactive version of the graph here. The key point I’m highlighting today, though, is that the IEA estimates, among other things, that the cost of an automotive EV battery pack was $293.4/kWh in 2016 but $156/kWh in 2019. Assuming the cost dropped a bit more in 2020, we’re sitting at a 2020 EV battery cost that is about 50% of a 2016 EV battery cost.

EV battery costs - pack level trends

Credit: Evolution of Li-ion battery price, 1995–2019, by IEA. 2016 price of $293.4/kWh highlighted.

Lithium-ion battery pack costs trend 2019

Credit: Evolution of Li-ion battery price, 1995–2019, by IEA. 2019 price of $156/kWh highlighted.

When you cut battery costs in half, you can offer a lot more range in an electric vehicle or you can cut the vehicle’s price by an enormous amount. This trend of the past several years is why we have truly competitive electric vehicles now arriving on the market. See:

The thing to keep in mind, which I warned about at the top, is that this is not the end of the story. There’s a decent chance the battery price trend you see above continues, with prices in 2025 being much lower than prices in 2020. If that’s the case, think about how much better a 2025 Model 3 will be than a 2020 Model 3. Think about a future Volkswagen ID.3 versus a future Volkswagen Golf. Think about a 2024 Renault Clio vs. a 2024 Renault ZOE. Think about a 2024 Ford Mustang Mach-E versus a 2024 Ford Escape.

If the lithium-ion battery price trend continues, electric cars are going to go far beyond “cost-competitive” into demolishingly cheap. While EVs will have similar or cheaper upfront costs as gasoline and diesel vehicles, they will also offer far lower operational costs.

The battery price drop is not a given. I’ve written and talked at length about the risk of insufficient mineral mining. It’s not clear how soon that will get resolved and on what terms.

Though, while mineral supplies may make some of us nervous, Tesla did present a bullish, lengthy, broad battery plan at its recent Tesla Battery Day event. It clearly sees ongoing cost and price reductions down the road for its batteries. So, at the very least, it seems that Tesla is ready for the future. We’ll see about the others.

The Electric Car Cost Tipping Point

I drafted a graph earlier in the year that basically tells the story of what we’re seeing in this industry. Have a look:

Battery costs will most likely continue dropping. Electric cars will continue to fall in price. Stay tuned to CleanTechnica as we continue to track these trends down their respective curves.



Related Stories:



Appreciate CleanTechnica’s originality? Consider becoming a CleanTechnica member, supporter, or ambassador — or a patron on Patreon.

Sign up for our free daily newsletter or weekly newsletter to never miss a story.

Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.


Latest Cleantech Talk Episode


Tags: , , ,

 

About the Author

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 NIO [NIO], Tesla [TSLA], and Xpeng [XPEV]. But he does not offer (explicitly or implicitly) investment advice of any sort.



Source

Leave a Reply

Your email address will not be published. Required fields are marked *