The hype behind electric cars is, well, high energy.
Yet sales of these save-the-earth vehicles could be seriously constrained by the high cost of batteries. So says a study by the Boston Consulting Group. But not all carmakers are buying into the conclusion.
Some argue rapidly expanding production volumes will significantly lower the costs of batteries for electric cars
Most automakers appear to be planning on advanced batteries that will cost as little as $250 a kilowatt-hour of energy. But achieving that goal by 2020 will be a stretch without a major breakthrough in battery technology, according to the study co-written by analyst Xavier Mosquet.
Battery costs will fall over the next decade, and already lithium ion offers a lighter, more powerful alternative to the nickel-metal hydride battery in the Toyota Prius.
However, today’s prices of $1,000 to $1,200 a kWh may not reach the $250 to $500 a kWh level, the study finds. Carmakers seem focused on this lower price level because it is close to the $250 to $400 per kWh cost of lithium ion batteries used in consumer electronics. Yet consumer electronics batteries are simpler than car batteries and have less demanding requirements in terms of lifespan and safety, says Boston Consulting Group. Prices of auto batteries may not fall this far.
Some carmakers are hesitant to draw the same conclusion. Greg Frenette, manager of global electrified fleets at Ford, says a major technological breakthrough would be useful, but might not be necessary.
Battery production will increase dramatically over the decade, and prices will fall significantly as the manufacturing lines expand, he says. By Boston Consulting Group’s own estimate, the market will reach $25 billion by 2020, or triple the size of the today’s consumer market for lithium ions.
“I think volume can have a significant impact on overall cost,” says Frenette. For electric carmakers, the metric will be a key one to follow.
Good post. Interesting read. I honestly think that Toyota are gonna struggle to win the customer over. The whole point of a Toyota was it was Mr Reliable. Not any more!