Electric Car Revolution: Falling Battery Costs Point to ‘Paradigm Shift’
The cost of batteries for electric vehicles has likely already fallen below projections for 2020, according to a study in the journal Nature Climate Change.
Batteries are the main reason EVs are more expensive than conventional cars, and “in 2013, the International Energy Agency (IEA) estimated cost-parity could be reached in 2020, with battery costs reaching $300 per kilowatt hour of capacity,” The Carbon Brief reports. “But market-leading firms were probably already producing cheaper batteries last year,” according to study authors Björn Nykvist and Måns Nilsson of the Stockholm Environment Institute.
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“We show that industry-wide cost estimates declined by approximately 14% annually between 2007 and 2014, from above US$1,000 per kWh to around US$410 per kWh, and that the cost of battery packs used by market-leading BEV [battery electric vehicle] manufacturers are even lower, at US$300 per kWh, and has declined by 8% annually,” they write.
“The paper estimates prices will fall further, to around $230 per kilowatt hour in 2017–18, ‘on a par with the most optimistic future estimate among analysts,’” Evans notes. “The crossover point where electric cars become cheapest depends on electricity costs, vehicle taxes, and prices at the pump.”
But “if costs reach as low as $150 per kilowatt hour,” the authors say, “this means that electric vehicles will probably move beyond niche applications and begin to penetrate the market more widely, leading to a potential paradigm shift in vehicle technology.”