Straubel estimated that battery performance has improved about 40 percent during the five years between the debuts of the Tesla Roadster and the Model S. Additionally, battery density has doubled during the past decade and continues to ramp up fairly steeply. He noted that further near-term improvements will come not from the size and shape of the cell, but from improved cathode and anode materials. Those energy improvements won't just help the cars. Tesla uses a two-megawatt-hour battery pack to supply as much as 10 percent of the peak energy used at the company's factory in Fremont, CA, and will double the size of that battery-powered energy capacity within the next few months, Straubel says.
Automakers like Tesla and Nissan are licking their proverbial chops at the prospect of substantially improved battery performance paired with declining battery costs as more and more lithium-ion battery packs get produced. Late last year, Navigant Research estimated that lithium-ion battery costs would fall by almost two-thirds by 2020, down to a low $180 per kilowatt hour. That should make electrified powertrains price-competitive with conventional vehicles, as electric vehicles could then command a price premium as low as $2,000 compared to their gas-powered brethren.