is reporting on a new study that suggests the cost of lithium-ion batteries
used in electric vehicles
could plummet dramatically by 2025. Consulting firm McKinsey & Co. conducted the study, which indicated increasing oil prices and tougher fuel economy
standards could force automakers to build more electric cars
, thereby increasing the scale of lithium-ion battery manufacturing by significant margins. In addition, the research predicts consumer electronics companies like Apple
may lend some technology advancements to reduce costs associated with producing the battery packs themselves. All told, the study expects to see prices fall from $500-$600 per kilowatt hour to $200 by 2020 and $160 by 2025.
For example, Reuters
points out that the 23 kilowatt hour battery in the 2013 Ford Focus Electric
is estimated to cost between $12,000 and $15,000. The McKinsey study claims that if fuel prices hold steady at $3.50 per gallon and batteries fall to the projected levels, automakers could begin to offer price-competitive electric vehicles.
The study also indicates battery manufacturers may begin to standardize cell construction and production, further reducing the cost of equipment needed to produce the packs.