As we approach the end of 2019 and begin to enter the 20s it’s kind of amazing to look back at just how far battery costs have fallen this decade:
Battery prices, which were above $1,100 per kilowatt-hour in 2010, have fallen 87% in real terms to $156/kWh in 2019. By 2023, average prices will be close to $100/kWh, according to the latest forecast from research company BloombergNEF (BNEF).Bloomberg
Let’s take the 75 kWh pack found in the Standard Range Model S and Long Range Model 3 for example:
In 2010, this battery pack would have cost about $82,500 to produce. That makes it difficult to produce a car at a reasonable price point. In 2020, just ten years later, Tesla’s price to produce that battery pack will fall to just $7,500. There’s still room for improvement, but that’s a game-changer for the viability of electric vehicles.
BNEF’s 2019 Battery Price Survey, published today at the BNEF Summit in Shanghai, predicts that as cumulative demand passes 2TWh in 2024, prices will fall below $100/kWh. This price is seen as the point around which EVs will start to reach price parity with internal combustion engine vehicles. However, this varies depending on the region of sale and vehicle segment.Bloomberg NEF
$100 / kWh is the magical price point where EVs start to reach parity with polluting cars, and no longer need subsidies. Governments should offer subsidies for the next 5 years to bridge the gap until manufacturers can hit the $100 mark on their own.
James Frith, BNEF’s senior energy storage analyst and author of the report, said: “According to our forecasts, by 2030 the battery market will be worth $116 billion annually, and this doesn’t include investment in the supply chain.Bloomberg NEF
Sooooo… Tesla is a $0?
BNEF’s analysis finds that as batteries become cheaper, more sectors are electrifying. For example, the electrification of commercial vehicles, like delivery vans, is becoming increasingly attractive.Bloomberg NEF
Who could have predicted this trend? Besides Econ 101 students, I mean.
The path to achieving $100/kWh by 2024 looks promising, even if there will undoubtedly be hiccups along the way. There is much less certainty on how the industry will reduce prices even further, from $100/kWh down to $61/kWh by 2030. This is not because it is impossible but rather that there are a variety of options and paths that can be taken.Bloomberg NEF
Read the full story at Bloomberg NEF
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One thought on “EV Battery Prices Fell 87% This Decade”
I predict Tesla will go below $100/kWh 2-3 years before everyone else. With new cell chemistry, their own cell production utilizing DBE tech, and new battery pack architectures, it’s gonna be insane how cheap Tesla battery packs get. How do people not see this, especially other auto manufacturers?