Count Lux Research among the pessimists when it comes to the costs of lithium-ion battery packs.

Lithium-ion battery costs will fall to about $400 per kilowatt hour by the end of the decade, more than double the $150 per kilowatt hour the U.S. Advanced Battery Consortium says will be required for battery-electric vehicles to be affordable to most of the car-buying public. So says a new report from Lux Research.

Not enough EV batteries will be made to create the economies of scale required for a substantial cost reduction, while few technologies aside from the current lithium-ion process, such as Li-air and solid-state batteries, will be developed in time to make much of an impact by 2020, according to the report.

The report is the latest to weigh in on how far battery costs will fall as automakers hope to ramp up on EV production to meet progressively more stringent greenhouse-gas emissions requirements both in the U.S. and abroad. Green-technology firm Pike Research said last month that lithium-ion battery costs may fall by about a third to about $523 per kilowatt hour by 2017, while global revenue for transportation-oriented lithium-ion batteries will jump to $14.6 billion in 2017 from about $2 billion in 2011.

Estimates of battery costs have varied as automakers and tech analysts have looked into ways to make them cheaper. The Nissan Leaf EV's battery pack has been reported to be as cheap as $375 per kilowatt hour, while Tesla Motors CEO Elon Musk said last month that battery costs may fall to less than $200 per kilowatt hour "in the not-too-distant future."
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Lithium Battery Cost to Drop to Under $400/kWh

BOSTON -- Early demand for electric vehicles and plug-in hybrid electric vehicles has fallen short of optimistic projections, as vehicles like the Chevy Volt have missed sales targets. The key to growing the market is reducing the cost of Li-ion batteries, according to a Lux Research report. While larger-scale production will help reduce costs, the effect of scale-up and likely technology improvements bring nominal battery pack cost only to $397/kWh in 2020 – far short of the $150/kWh target from the U.S. Advanced Battery Consortium (USABC) and not enough to reach the mass market.

"Searching for Innovations to Cut Li-ion Battery Costs"
"Vehicle applications demand a different scale in both size and performance, and no other incumbent technology combines the power and energy performance of Li-ion batteries," said Kevin See, Lux Research Analyst and the lead author of the report titled, "Searching for Innovations to Cut Li-ion Battery Costs."

"Plug-in vehicles' fates are tied to the cost of Li-ion batteries, so developers need to focus on the innovations that have biggest impact on cost," he added.

To see what technologies can impact Li-ion battery cost, Lux Research studied the cost structure of Li-ion batteries, and considered the innovations that could drive disruptive decreases in cost necessary to spur growth of the electric vehicle market. Among their conclusions:

Materials improvement and scale are insufficient to cut costs. While scale does have a significant impact in driving costs down, it is not likely to lead to a disruptive drop in battery pack costs unless coupled with other innovations.
Cathodes remain the biggest target. Cathode capacity and voltage improvement hold much more value than anode innovation. In the optimal case, with a maximum voltage increase of 1V and capacity increase of 200 mAh/g, the nominal pack cost dropped 20%.
Beyond Li-ion remains a focus. Technologies such as Li-air, Mg-ion, Li-S and solid-state batteries push past the limitations of Li-ion batteries and achieve higher energy densities and specific energies. Each technology has its supporters – PolyPlus and IBM for Li-air, Toyota for Mg-ion, Sion Power and BASF for Li-S and Sakti3 for solid state batteries - but all face significant obstacles. A clear leading contender that can meet strict requirements on cycle life, power performance, and manufacturability has yet to emerge.

For more information, please click here to register for the complimentary Lux Research webinar, "Materials Innovation and Cost Cutting Strategies for Li-ion Batteries in Transportation," on April 3rd at 11:00 EDT.

The report titled, "Searching for Innovations to Cut Li-ion Battery Costs," is part of the Lux Research Electric Vehicles Intelligence service.


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    • 1 Second Ago
  • 51 Comments
      • 1 Year Ago
      Lead foam - Cobalt batteries cost about $75 per kWh. See Apollo Energy Systems. That seems to be the technology of the future.
      Ford Future
      • 2 Years Ago
      The price of batteries is predictable and will drop with technology. The price of gas is unpredictable and will rise, and has risen, with the increase in the Industrialization of China. The price of gas is now effected by the price of tar sand extraction, and pipelining. If you're a business, and plan to make a long term fleet cost bet, the SAFE bet is EV's. You can always fund EV's with a Solar Panel installation on your roof, and save even more. All PREDICTABLE costs vs. oil which is now influenced by, no large discoveries, Chinese and India population, and by the Paper Oil Market Speculator.
      lad
      • 2 Years Ago
      What is the background of the people who did the study; what are their biases? Who paid for the study? Lux Research Electric Vehicles Intelligence service; sounds like a spy outfit from a country called Lux. I believe that Li Ion batteries will go the way of all things electronic... they will get smaller, lighter, more powerful and cheaper as the technology marches forward. Did you know that Pb batteries are so automated that it takes less than a minute to assemble one battery? I think we will see pretty much the same in the assembly of Li Ion cells once the demand is high enough.
      Dave D
      • 2 Years Ago
      What is sad is that we don't hold these "research groups" responsible for their horrendous work. When battery prices end up being $200/kWh by 2016, nobody will go back and bring up all the false predictions made by Pike and Lux, et al. Why do people continue to pay money to companies who prove time and again they have no more ability to predict the future than a baboon throwing darts at a dart board to predict stock prices???
        Ford Future
        • 2 Years Ago
        @Dave D
        I don't think Exxon's CEO would be dumb enough to use these stats for long term planning. They know this is BS for the market, just like their global warming hoax BS. The only question is does Exxon actually do any real long term planning.
      Tysto
      • 2 Years Ago
      I'm greatly relieved to find that this comes from a research firm whose website is made entirely of Dreamweaver built-in templates and stock photos. For a minutes I was worried that they might have some credibility. I'll stick with Elon Musk and his real-world, industry-leader expectations.
        Spec
        • 2 Years Ago
        @Tysto
        Keep in mind that Elon Musk has an financial motive to say battery prices are coming down since that will attract investors to his Tesla stock. I'm just saying use your critical thinking with all sources.
          Spec
          • 2 Years Ago
          @Spec
          Well good for Panasonic. I've watched the prices of the Thundersky Li-Ions often used in hobbyist EV conversions and the prices for them have been pretty stable for a few years now. I was hoping they would drop.
          Ford Future
          • 2 Years Ago
          @Spec
          You can track Panasonic's battery price and capacity yourself from their web site. Capacity has been going up, prices are dropping. That's been going on for years now.
      EZEE
      • 2 Years Ago
      Predictions are fun, but meh. Iran gets fussy and gas doubles, research into batteries goes way the heck up. IBM perfects their battery...Toyota gets their solid state...people all over the planet are working on things. As Marco points out, the oil companies are afraid of losing their position, so they are working on things. I would honestly wager any of these people $1,000 that SOMETHING will happen between now and 2020 that will change things with batteries. Someone won't build a plant in china with cheap labor, or someplace else with robots, to lower the price? No economies of scale?
        Dave
        • 2 Years Ago
        @EZEE
        IIRC- IBM (lithium air) and Toyota (solid state) were both predicting 10+ years before commercialization. So, perhaps they'll hit the market in 2021 or 2022. I fully expect that battery prices will drop. But 8 years really isn't a very long time.
      Dave
      • 2 Years Ago
      Most of the commenters seem to be quoting cell prices. From the press release ".....likely technology improvements bring nominal BATTERY PACK cost only to $397/kWh in 2020....." (emphasis added) That means that the wiring, housing, battery management system, etc. are included in the cost estimate, not just the cells. Apples to oranges.
        CanaDoc
        • 2 Years Ago
        @Dave
        "Most of the commenters seem to be quoting cell prices." Ya, I considered that as I wrote my bit... but, really, the cell cost IS the bulk of the pack cost. Since you brought it up though, as per: http://dukespace.lib.duke.edu/dspace/bitstream/10161/1007/1/Li-Ion_Battery_costs_-_MP_Final.pdf "Additionally, cell-level materials cost account for approximately 85% of the pack-level materials cost." So I guess my $409 was 15% low, let's say today's price is $470/kWh then. I'll revise my statement: if the cost I pay today is 115% of the 2020 amount and costs are dropping about 8%/year, I guess I'm only living in 2018. Better? I'd say more like "apples to applesauce"
        DaveMart
        • 2 Years Ago
        @Dave
        Yeah. Which is why I used battery pack prices, and their figures are still way too pessimistic.
          DaveMart
          • 2 Years Ago
          @DaveMart
          There are trade offs which can be made in cycle life against cost, but there would seem no reason to be so pessimistic about cost reductions even in long life batteries. The next stage in batteries for Nissan, for instance, looks like being NMC batteries, which not only have up to twice the energy density of manganese spinel but tend to have greater cycle life, in fact in some variants up to 5,000 cycles. There are too many hopeful variants in high cycle life batteries such as Hyundai's polymer battery to enumerate them all in detail, but perhaps again reference to the DOE paper where they would have considered numerous options throws some light on it. Their battery cost projections of $300 kwh for 2015 are for plug in hybrids, which have faster cycling life than BEVS, so that cost projection for 5 years before the 2020 date clearly envisages high cycle life batteries at $100 less than than cost five years earlier.
          Dave
          • 2 Years Ago
          @DaveMart
          The other issue, which is not addressed in the press release, is lifespan. In 2020, it may cost $250 per kwh for a battery pack that lasts less than 100,000 miles while a battery pack that lasts the life of the car without degredation (lets say 200,000 miles) will still cost $400 per kwh.
      • 1 Year Ago
      Lead foam - cobalt batteries cost about $75 per kWh. See Apollo Energy Systems.
      diffrunt
      • 2 Years Ago
      Waiting for 3rd gen batts.
      brotherkenny4
      • 2 Years Ago
      Cost at the current technology level can possibly be gotten to $350 per kWh, based on a volume assumption of 100,000 units (DOE numbers). So not too far from the $400 quoted here. This assumes no improvement such as the cell capacity doubling work reported by Envia. I know their report (Envia's) is somewhat limited in real information, and as such is highly speculative, but there are some reasonable bits of information. First, they say they have solved the issue with the Mn based cathode. Typically, cathodes contain Co and Ni which are much more expensive than Mn. The cathode materials are the most costly component in Li ion batteries. It's yet to be seen if the envia thing is real, but it has some potential to be at least better than previous generations of Li ion. However, there are numerous alternative paths some of which are even more likely to work or will have a larger impact. Rechargeable sulfur cathodes would be one such success. numerous people are working on Si anodes. High voltage electrolytes and electrodes. It goes on and on, and some we know are already working and in the pipeline for production tests. I always have to wonder what it is that makes people put out stuff like this Lux report? I guess it is that someone paid them to do it.
      Spec
      • 2 Years Ago
      $400/KWH might be a very attractive price in 2020 if the price of gasoline is $8/gallon then. My prediction has always been that battery prices will drop a little bit over time due to innovations, mass manufacturing scale, and battery chemistry refinements. But the drop won't be drastic. I think the bigger factor for the adopt of EV will be rising gas prices. So with battery prices dropping and gas prices rising, we eventually hit a tipping point. We may have already hit the tipping point but people just don't realize it yet because the total ownership costs include costs that we can't yet predict since we don't know future oil & battery prices.
        DaveMart
        • 2 Years Ago
        @Spec
        Hi Spec. I reckon the drop in lithium battery prices is pretty well documented, at around 8% per year, with reputable companies like Toshiba saying that they are doing better than that. Here is the DOE, about as reputable as you can get, which puts present prices at $500 kwh, ball-park similar to the figures I came up with based on Renault's lease price, with $300 kwh in sight for 2015: http://www.greengov2011.org/presentations/FleetManagement/GreenGov-2011-Fleet-S8-PatrickDavis.pdf Battery price progress tends to move in jumps rather than smoothly at 8% per year. The next move may be to NMC batteries from the present manganese spinel, and they should get us to about the $300 kwh target. Where the high figures and predicted slow drops in price come from is these mysterious organisations such as Lux and Pike, which do not operate under the constraints of proper academic research having to source their information, subject it to peer review and so on, through all that tedious process of critical examination of their claims, as you have to pay hundreds of dollars for their reports, and my suspicion would be then that the information would not be properly sourced, with confidentiality on behalf of companies used as an excuse. This of course makes them an ideal vehicle to any interests wishing to downplay the likely impact of electrification on vehicles. This is precisely the purpose and the rationale for these rather wild claims of static lithium battery prices out to 2020 in my view. Unless you have specific information to the contrary there would appear to be no reason to discount the DOE's view in preference for the bought and paid for 'research' organisations.
      Sasparilla Fizz
      • 2 Years Ago
      Advanced research brought to you by the Western States Petroleum Association (WPSA).... What a bunch of rubbish. Somebody better tell Lux about the Nissan Leaf in 2012 and the Tesla Model S (I believe its below $400 kWh as well). What will Lux say when Leaf v2.0 comes out in 2015(?) and drops prices per kWh further? I'd expect Volt v2.0 to have battery costs below $400 kWh when its released (2015?) as well.
        markrogo
        • 2 Years Ago
        @Sasparilla Fizz
        Correct, Nissan and Tesla are already below this price, making this report laughable at best.
        Electron
        • 2 Years Ago
        @Sasparilla Fizz
        One look at the Model S price list teaches you that Tesla is offering extra battery capacity at $400/KWH today. That's retail and since Tesla really pushes these larger packs it's probably a real moneymaker for them. Of course that may just be Tesla's strategy of using multi-purpose 18650 cells rather than special developed large cells paying off.
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