Our most burning question – aside from how many licks it takes to get to the center of at Tootsie Pop – is, how much does a battery-electric vehicle's battery really cost? One analyst says that the price tag will be at about $250 per kilowatt hour by 2015, which spells good news for the EV industry.

Roland Berger Strategy Consultants' analyst Wolfgang Bernhart told EV Update that the cost of a typical plug-in hybrid-electric battery "in Japan and Korea for contracts with a 2015 delivery" will be at about $250 per kilowatt hour. Raw materials account for almost 60 percent of the costs while labor, utilities and depreciation take up about a third.

The estimate follows up Roland Berger's analysis last month that said there would be "massive overcapacity" of lithium-ion battery packs by 2015 with supply running about twice the expected demand and driving prices down to less than 200 euros ($253 U.S. at today's exchange rate) per kilowatt hour by that year. About three-quarters of the global market will be controlled by AESC, LG Chem, Panasonic/Sanyo, A123 Systems and SB LiMotive.

Automotive analysts are watching battery costs closely because batteries typically account for more than a quarter of the cost of a plug-in vehicle. In April, Bloomberg New Energy Finance estimated battery costs at $689 per kilowatt hour, down from $800 a year earlier. Other estimates for where the prices go from here include $400 per kWh by 2020 and less than $200 per kWh by "soon." We'll let you know which one is right in eight years.


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    • 1 Second Ago
  • 54 Comments
      BipDBo
      • 2 Years Ago
      I don't know about 2.5 years from now. That just sounds too good to be true. When batteries do get volume up and get cheaper, I hope that there will be be some affordable availability for the components to DIYers. I have dreams of building a kit car, specifically a Factory Five 818. I'd love to put motors on the front wheels driven by a smallish, maybe 8 kw*hr battery to make a through the road plug-in hybrid. It's probably an unrealistic hope, though. I doubt with the hysteria of electrocution an fire concerns that they will hand components over to garage engineers any time soon.
        Spec
        • 2 Years Ago
        @BipDBo
        I think it is wise to be skeptical. There are people that predict $80/KWH batteries but that just seems crazy. Predicting innovation progress is notoriously difficult. But if we really do get mass market scale, prices should come down a bit. It might actually be regular hybrids and plug-in hybrids that use Li-Ions which build up the market scale and ultimately build the bridge to making pure EVs more practical.
        Elmo Biggins
        • 2 Years Ago
        @BipDBo
        Where in the article does it say wholesale price available to the public? Unless you are an automaker with a deal for large production volume, why would you expect that price the first year out? Gotta wait a couple years for it to trickle down...
        • 2 Years Ago
        @BipDBo
        You can buy a 2, 4 or 8 kWHr battery from enginer.us. It is for the non-plugin Prius, but you can probably fit it in other hybrids.
        Nick
        • 2 Years Ago
        @BipDBo
        Aren't there already plenty of batteries and EV components you can buy off the shelf?
          2 Wheeled Menace
          • 2 Years Ago
          @Nick
          It's true, Bip. In the EV car world, the DIY guys basically get the scraps. Even if the tech in question is very safe ( A123 20AH cells, for example, which are ultimately less dangerous than playing around with deep cycle lead acid batteries. ) That was true in the 2 wheel EV world for a long time, but that's slowly changing. In many instances, the hobbyists get better stuff than the big corps.
          BipDBo
          • 2 Years Ago
          @Nick
          Yes, but from my understanding, not at nearly the price that the manufacturer's get it. I may be wrong, but I think that the most advanced batteries and components aren't even avilable off the shelf.
      DaveMart
      • 2 Years Ago
      There is a truly excellent cost breakdown at the EV update link. Highly recommended. Buy an EV now. Your replacement battery in around 2020 should only cost you $5,000 or so.
        Rob J
        • 2 Years Ago
        @DaveMart
        That's assuming you can still get a battery for that model - technology is a b--tch like that, changing standards and platforms making things hard.
          DaveMart
          • 2 Years Ago
          @Rob J
          True! :-(
          JP
          • 2 Years Ago
          @Rob J
          Since many of us are putting batteries in ICE vehicles and turning them into EV's I'm not projecting any problems in putting batteries in EV's of the future.
          Lou Grinzo
          • 2 Years Ago
          @Rob J
          Please don't start ridiculous notions like batteries not being available in 8 years for any model of EV. The economic incentives to provide the batteries will be enormous, unless we're talking about a truly niche-of-a-niche product that has no more than a few dozen units on the road. I think that by far the most likely scenario with EV battery prices overall is a continued ramp-up of production and the number of EV models for sale to the public, declining battery prices, and some sharp spikes in demand for EVs when gasoline gets really expensive. People here in the US go nuts when gasoline is $4/gallon. When it hits a national average of $5 to $6, even for a short time due to a war-triggered price spike, for example, it will be the 1970s oil embargoes all over again in terms of hysteria.
          Joeviocoe
          • 2 Years Ago
          @Rob J
          I think automakers that actually have a production model, and sell (not just lease) to the public... are forced by law to make replacement parts for at least 10 years after the model discontinues production. One of the excuses/reasons GM gave for crushing the EV-1 instead of letting people buy them. There were big costs associated with supporting replacement parts.
      Rob J
      • 2 Years Ago
      Economic analysts were put on this earth to make political analysts look like credible sources. While I don't dislike the idea of cheaper batteries, we will just see when we will see.
      • 2 Years Ago
      Regardless of price I think car makers should offer options to car buyers. E.g. plugin hybrid with 2kWh pack, that can be expanded to 4kWh pack (at a higher price) or 8kWh pack (at an even higher price). If I drive 5 miles to work I don't need the 8kWh pack. If I drive 20 miles I am going for the 16kWh pack and so forth. I realize the car gets heavier with the bigger packs, but within a certain range (e.g. from 2kWh to 16kWh) I should be able to choose how much battery I want.
      MTN RANGER
      • 2 Years Ago
      I object to using "burning question" and "electric vehicles" in the same sentence. :-)
      • 2 Years Ago
      Another wrinkle in the equation is this: the cost per usable kw-hr. Suppose we had two different 1 kw-hr batteries, one costing $400 with a chemistry that allows it to be completely charged and discharged without battery degradation and the other costing $200 that can only be charged to 90% and discharged to 40% capacity. Clearly, the cost per usable kw-hr for both batteries are the same, but less careful analysis might suggest that one is half the price of the other. I really don't know where these analysts are going with these predictions, because it's not clear to me if they are even aware of this issue. Clearly the engineers are, because I've seen the subject of degradation and cycling seems to be one of the main R&D topics in the labs, from what I'm reading.
        Anne
        • 2 Years Ago
        I don't think this is going to be the issue. Why? Because a) batteries will get larger and b) charging infrastructure will improve. Both will minimise the number of deep cycles. What helps here is range anxiety. People will rather charge early than 'run on fumes'. Really deep cycles will be rare, perhaps a few times per year. This is no problem for the chemistries we have now. Calendar life is more of a problem that needs to be addressed. Batteries should last the life of the car with no more than 10% degradation.
      PR
      • 2 Years Ago
      Check back in 8 years? The truth is that we the public will never know the wholesale cost of batteries. Just like we don't know the wholesale cost of engines or transmissions. All we will ever see is what retail price the market will bear.
        Dan Frederiksen
        • 2 Years Ago
        @PR
        not quite true PR. sometimes they reveal true cost and we can get prices from bulk resellers and deduce bounds from that. I can tell you with some certainty that LG cells are below 250 already today. an educated guess is around 200 but it could even be below that but probably isn't. a VW official said a few years back that a typical 2L diesel engine costs them 2000euro. and once the supply chain of obtuse children from unwed parents get the rears in gear the price of batteries can drop dramatically still. right now the battery pure grade of the chemicals is rather expensive but it can drop to a quarter of that. lithium is not that expensive and it's only a very small amount in a battery. the rest is dirt cheap stuff like iron, phosphor and carbon. batteries can go well below 100$/kWh, maybe below 50. at which point the combustion engine is in serious trouble. if someone with power straightened out the supply chain and said this is how it's going to be because it's a matter of national security it could happen 'overnight'. if say hypothetically Steven Chu wasn't mindless and Obama wasn't a tool. it will happen but it will just be bumbling over 20 years instead of 2. or I should say it will go on until such time ET disclosure happens or some other dramatic event changes the world. at which point all bets are off
        Spec
        • 2 Years Ago
        @PR
        Very true. But some information leaks out and we can make ball-park estimates based on how much publicly available Li-Ions cost, various interviews, replacement parts costs, etc.
          PR
          • 2 Years Ago
          @Spec
          agreed, it is just frustrating how limited and unconfirmable the leaks are. The size of the ball-park is also frustratingly huge for making estimates of wholesale costs based upon various publicly available retail prices. It is almost as frustrating as trying to figure out the wholesale cost of uncut diamonds based upon ever-fluid retail jewelery prices at your local mall, along with a couple of comments from your Uncle Joey back in Jersey who says he "knows people in the business"....
        SVX pearlie
        • 2 Years Ago
        @PR
        Based on crate motor costs, and public information on corporate overhead, one can make a reasonably educated guess.
          PR
          • 2 Years Ago
          @SVX pearlie
          SVX -- Not really. Take for example a GM 350 crate motor. It isn't even built in the same factory as the motors that are put in production cars, and the division that builds crate motors is a separate entity within the company than the group that builds motors for production cars. Individual part numbers aren't even the same, with crate motors being spec'ed out completely differently than production engines. None of the high level corporate numbers could ever possibly be parsed down to individual costs of any single product. The best you could do would be to estimate the average margin over all parts.
      2 Wheeled Menace
      • 2 Years Ago
      My question is... where's the meat in this prediction? do they know something about improved battery tech or production methods that we will see in the next 3 years? I've been reading stories like this since 2007, but as a hobbyist the cheapest that cells have came down to is about $360/kw-hr... and those are dicey Chinese cells.. Retail pricing of the unobtainium LG, Dow, A123 etc cells ends up being well over $500/kw-hr.. *if* you can get your hands on them. EV versions of mass produced cars seem to indicate that the batteries don't exactly come cheap. Either that or the companies are charging a major premium. Not sure which. I'd trust what Elon Musk is saying before anyone else tho.
        Spec
        • 2 Years Ago
        @2 Wheeled Menace
        Did you read the article? The guy is an engineer and does seem to have a bit of a clue. It is much better than you standard Pike Research drek. I still don't understand why you would trust Elon Musk, a person with a huge vested interest in getting people to believe battery prices will go down. He certainly may be telling the truth but he does have a big incentive to spin things in his own best interest. Of course, no one really knows the full answer.
        Elmo Biggins
        • 2 Years Ago
        @2 Wheeled Menace
        You expect battery makers to wholesale to hobbists the same units they are putting in first production-year EVs..at the same cost they charge automakers doing large volume orders? Why would they? Their isn't even a market for them make and shelf the batteries yet, especially when they can get hard contract for each unit produced at a set price.
        2 Wheeled Menace
        • 2 Years Ago
        @2 Wheeled Menace
        I didn't read all the article, sorry, i am a butthead. Elon can't stretch the truth too much about what he's using because the panasonic cells are not unobtainium like what most are using. Next on the list of the dude i trust is Mr. Ghosn.
      Dan Frederiksen
      • 2 Years Ago
      the source article seems to be talking about cell pricing and LGchem automotive cells are at around 200$/kWh today. not 2015, today. so the analysis is somewhat of a failure. but since 3 years is not that long for battery cost to drop, then 250 might not be that far off at the pack level. A123 is dead so for them to be relevant in 2015 someone will have to revive them in a major way. A123 is dishonest, obtuse and burning cash at fantastic rates. serious changes are required to make them viable despite very good product
        Spec
        • 2 Years Ago
        @Dan Frederiksen
        " LGchem automotive cells are at around 200$/kWh today" Any evidence for this besides your imagination?
          2 Wheeled Menace
          • 2 Years Ago
          @Spec
          Hey rick James, where are you getting this quote? email me.. neptronix @ gmail.com
          Dan Frederiksen
          • 2 Years Ago
          @Spec
          victpower from alibaba.com
          Dan Frederiksen
          • 2 Years Ago
          @Spec
          I'm Rick James, bitsch : ) I have quotes from bulk reseller of LGchem 2600mAh cells at 239$/kWh in moderate volume. that means GM could get them cheaper directly from LG and in volume. and another indication from a prior article here on ABG saying LG cells were 1/3rd the price of their japanese cells. knowing that prices from many other cell makers are a bit above 200 it all adds up to a basis for my conclusion. if you can't handle fuzzy logic like that, that's not my failure. and if the various insider engineers/bean counters from GM, Ford, Nissan etc would participate publicly instead of living in ignorant isolation it wouldn't have to hinge on my deductions which so many so consistently foolishly discard as folly
      Marco Polo
      • 2 Years Ago
      These predictions are always being made by people with quite honest and sincere belief. So why do so few ever materialise ? Part of the problem is the assumption that battery technology will become cheaper with mass manufacture and cheaper components. Although this is true of many products, it may not hold true for Automotive EV batteries. For a beginning, even though hybrids are being produced in quite respectable numbers, EV's are still built in very small production runs, making truly volume production difficult. . In addition, each maker wants to have an 'exclusive' battery ! Battery technology continues to advance rapidly, each new technology, renders the previous technology obsolete. The new technologies, don't share any of the same components as the old technology and often contain new and exotic , difficult to obtain, or expensive materials. These are just some of the reasons why EV battery costs may remain high for many years to come.
        Joeviocoe
        • 2 Years Ago
        @Marco Polo
        "These predictions are always being made by people with quite honest and sincere belief. So why do so few ever materialise ?" Actually, "Bias" need NOT be attributed by malice or insincere beliefs. The number factors that are part of the equation x uncertainty of those factors x the number of years projecting into the future.... any chaotician would tell you that you are asking for trouble. With so much variability (chaos) in the predictive price of batteries, a person's (or firm's) bias will lean toward a more rewarding conclusion... whether directly profiting or encouraging the commissioning of similar 'studies'. Even a neutral party will eventually notice that favorable conclusion draws more requests to write more. And parties that could stand to profit won't ever write a study that is unfavorable. This happens in Battery tech. This happens in Hydrogen tech (more money involved too). And this happens all the time in speculative energy markets such as Oil, Gas and Coal too. The technology is one thing... but Price and Cost depend on far too many unknowable factors.... so that even "educated" guesses are still far more likely to be wrong, than to be right.
          Marco Polo
          • 2 Years Ago
          @Joeviocoe
          Joeviocoe Joe, What a pleasure it is to receive a reply from someone who can work the term 'chaotician' into an paragraph ! :)
        JP
        • 2 Years Ago
        @Marco Polo
        "The new technologies, don't share any of the same components as the old technology and often contain new and exotic , difficult to obtain, or expensive materials. " Really? I think the majority of the various lithium chemistries share a lot of materials and construction methods.
          Marco Polo
          • 2 Years Ago
          @JP
          JP Do you think lithium technology is as good as it will ever get ? Just as Lead Acid gave way to NiMH, lithium will in tern give way to more sophisticated energy storage systems.
        Anne
        • 2 Years Ago
        @Marco Polo
        Lithium Ion battery costs have come down substantially over the past 10-20 years. The burden of proof lies with you to show that that trend will suddenly stop.
          Marcopolo
          • 2 Years Ago
          @Anne
          @Anne , You will notice, I used the term 'may' ? There is no "burden of proof", I am simply outlining some of the difficulties in making such predictions. It may well be that a totally different energy storage device, (Ultra capacitors, Nanotube, etc) can replace battery technology very cheaply. I am simply saying, it's impossible to predict the direction of such a fast moving, and varied, technology. It really doesn't matter whether Lithium ion batteries, reduce in price. Lithium ion is an inadequate technology to drive mass acceptance (and therefore volume production of EV's). Within a very short space of time several better battery technologies will emerge rendering Lithium ion obsolete. Each of these technologies, will seek to recover R&D and development costs from the potential customer base. When the predations were made, it was hoped that EV models, once mass produced, would sell in the hundreds of thousands, not in the thousands. If you assume that the present battery technology, is as good as it gets, then Ev's will never achieve sufficient mass production to be able to support volume demand. If you don't accept that, then you must assume that better technology will render present batteries obsolete ! Um. that seems fairly obvious.
        Spec
        • 2 Years Ago
        @Marco Polo
        Yeah, the fact that there are still a lot of different players and different battery chemistry mixes does slow the cost drop. However, there is still some cost drop as the supplier chain that supplies the basic materials that are common to many of the different batteries grows & matures.
        Elmo Biggins
        • 2 Years Ago
        @Marco Polo
        EV batteries ARE getting cheaper. Most predictions focus on 2015 on forward, so they haven't even had a chance to be proven wrong. You also said EV battery cost won't go down with mass production because EVs aren't currently mass produced...eh. You know a contradiction isn't a validation of an argument right?
          Marco Polo
          • 2 Years Ago
          @Elmo Biggins
          Elmo Biggins I think you miss my point. One of the reasons EV aren't mass produced, is the problems associated with energy storage. Mass production of a battery designed for a particular EV would be economically suicidal unless the battery could be used for other mass marketed products. To achieve any kind of price reduction through volume unit cost savings would require a battery to be produce in the millions. Buy that time the technology would have changed, and these batteries would have become obsolete long before the could reach such volume. The argument that people only need a 70 mile range, is not justified out in sales figures.
      aaronm_mt
      • 2 Years Ago
      And with intensive recycling, the cost should improve. http://hondasacuras.blogspot.com/2012/06/honda-to-begin-reuse-of-rare-earth.html
        JakeY
        • 2 Years Ago
        @aaronm_mt
        That helps nimh batteries. Doesn't help lithium ion at all given they don't use any rare earths.
      DaveMart
      • 2 Years Ago
      Anyone know what he is referring to by: 'HCMA'? Googling it only comes up with him and Hitachi Construction Materials Australia! :-) Hybrid Cobalt Manganese Alloy?
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