The Latest on EVs: Battery Costs Down and Extended Ranges on the Rise

April 22, 2015 | 2:02 pm
Rachael Nealer
Former Contributor

I’ve been thinking a lot about batteries. That’s not a sentence you hear everyday, but as I’m doing my research at UCS it has become a big priority of mine. Mostly because the lithium-ion battery is the largest difference between electric vehicles (EVs) and gas cars in terms of costs and environmental impacts. Recently, however, we’ve had some exciting news…

Nissan Leaf at the 27th Electric Vehicle Symposium in Barcelona Spain November 2013.

Nissan Leaf at the 27th Electric Vehicle Symposium in Barcelona Spain November 2013.

New study says: Battery costs less than projected

First, not surprisingly, costs have come down as government and industry have invested more and more resources in battery development. The exciting part is that the costs have come down more than experts predicted. And not only are we seeing more EVs on the road, with their prices falling, but we’re seeing new promises of larger battery EVs that will drive further distances on a full battery. A recently published journal article in Nature Climate Change looked at 80 studies that predicted years ago (2007 to 2014) where battery costs would be today and found that most experts thought battery costs would be around $410 per kWh. Today’s batteries actually cost more like $300 per kWh, despite starting at $1,000 per kWh in 2007.

Industry says: Let’s add more range

There are a couple ways the battery cost reduction impacts the EV market. It could make current battery sizes more affordable or it could increase the range of the battery at a similar cost to current batteries, or a combination of both.

There has been a wave of industry announcements about increased battery sizes. Some of those announcements include GM introducing the Bolt, a new long-range battery-electric vehicle, Nissan hinting about a longer-range LEAF in the next couple years, and Tesla is building the Gigafactory, a battery production facility in the US. You can read more about the Gigafactory in one of my last blogs.

Where’s the battery “sweet spot”?

The other alternative is to reduce the costs of current batteries, keeping the size the same. The batteries currently available are about 25 to 30% of the cost of the entire vehicle. If we look at the Nissan LEAF with a 24 kWh battery, the current price ($300 per kWh) is around $7,200. Reducing it to $150 per kWh, or what experts think is the “sweet spot,” would make it $3,600. We wouldn’t expect all of those cost reductions to be passed on to the consumer, but hopefully it would have a significant impact on the total price of the car, making EVs even more accessible.

You may be thinking, well if we were at $1,000 per kWh in 2007 and now at $300, a $150 per kWh battery doesn’t sound so hard—so how do we get there? The challenging part is that as battery costs decrease it becomes harder to find places to cut costs. Still, with continued investment in battery research and development from the Department of Energy and national labs like Argonne National Lab, and with industry investments from Tesla, GM, and Nissan, I think we can get there. Technological advances from research and implementation and increases in production of current vehicles can also help bring costs down.

Reaching the “sweet spot” sooner rather than later will mean more affordable, cleaner, and longer-range EVs—and that’s cause for celebration!