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Lux Research forecasts Li-ion EV battery pack costs to decrease to $397/kWh in 2020

While larger-scale production of Li-ion batteries will help reduce costs, the effect of scale-up and likely technology improvements bring the nominal Li-ion electric vehicle battery pack cost to $397/kWh in 2020—short of the $150/kWh target from the US Advanced Battery Consortium (USABC) and not enough to reach the mass market, according to a new report from Lux Research.

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. 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.

—Kevin See, Lux Research Analyst

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.

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

Comments

Davemart

Wow! Renault must be making a huge loss then, as their battery lease prices indicate that they are at something like $400kwh now.

Nice bit of agitprop from the oil industry.

Paul

Lux research are clueless... seriously! The price TODAY is lower than what they're forecasting in 8 years time... These are SPONSORED reports, no question!

Jimr

Have they no heard of ENVIA

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@Davemart

Unfortunately you cannot use the battery lease to estimate the cost of the battery because it is quite clear to me that Renault use some of the proceeds from the Zoe to subsidize the battery lease. EVs without battery packs costs less to manufacture than similar sized gasoline vehicles. The Zoe is priced at €21,000 before government subsidies and that is about €5000 more than the car cost to build to my best knowledge. You still have a 15,000 USD battery pack in the Zoe or about 681 USD per kWh for the Zoe battery. The $397/kWh in 2020 sounds reasonably to me and will also make the Zoe more affordable at that time.

Account Deleted

Envia is BS and their CEO does not have a clue about what things costs in his business. They will eventually run out of money and bankrupt. Or by the time they actually have some batteries to sell Panasonic will already be in mass production with something similar at lower costs.

SJC

This is more like the reality, without another breakthrough like vanadium, sulfur or other method that doubles the density and reduces the cost per Wh, there will be no major reduction in prices.

HarveyD

During the transition period (ICEVs to BEVs) the dying industries will pay for many false surveys, studies, etc. This may be one of many more to come.

Davemart

'Unfortunately you cannot use the battery lease to estimate the cost of the battery because it is quite clear to me that Renault use some of the proceeds from the Zoe to subsidize the battery lease.'

And exactly how have you determined that?

Setting up the production lines and low volume production of the parts peculiar to electric vehicles are both expensive, and Renault are doing the electric version at about the same price as the diesel, so to me it seems that much of the 5,000 Euro subsidy will be soaked up by that.

We can also come out with figures in the $400-500kwh ballpark for car batteries in other ways.
The difference in the price of the Tesla S for the 40kwh packs and 60kwh packs is $10,000, and at least the charger is also upgraded between the two models.

Here is DB on batttery prices:
'Several Automakers have told us that they have already seen bids in the mid-$400/kWh range for large volume EV battery pack contracts in the 2011/2012 time-period (implying a 30% decline).'

http://www.scribd.com/doc/28104500/Deutsche-Bank-Electric-Car-Analysis-Batteries

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Davemart

Renault is building a 150k unit factory for the Zoe. This is not low volume. This is fairly high volume. They also use identical battery cells as Nissan’s EVs so the battery cells are really mass produced by the end of next year (about 23kWh times 400000).

Also Tesla’s prices indicate costs of 500 USD per kWh (10k USD/20kWh). However, they use high energy density cells in a consumer format 18500 with about 600 cycle life that are known to be less costly than the high power / long cycle life 1500 cycles cells that are needed by Nissan/Renault for their smaller battery packs.

Renault plant 150k units
http://www.plugincars.com/zoe-cute-and-affordable-little-french-electric-car-renault-119653.html

Davemart

'Renault is building a 150k unit factory for the Zoe. This is not low volume.'

There is a difference between 'is building' and 'has built.'
Nissan Renault themselves say that they need around 500,000-1 million Ev's a year production to match the costs of a diesel car without subsidy, and it is that that they are trying to achieve by getting to high volume as soon as possible.

This year production of Nissan/Renault will be around 80,000 vehicles, which is getting there but a long way short.
The set up costs are being incurred right now,too.

So I can't see how most of the subsidy is not going to the car rather than the battery at the moment, although there might be $100/kwh subsidy in the battery price.
That's a hefty $2200 for a Zoe, and the remaining $4,000 or so of subsidy will be needed for the rest of the car IMO.

Things will change when we actually hit mass production instread of are building up for it, but subsidies will evaporate on a similar timescale, the first 200,000 in the US per company are all that are eligible for subsidy, for instance.

Lad

About $400 per KWH? I'm guessing more like $200, or $100 per KWH...no one knows yet, so, it's all a game.

Anyway, I'll take $400 if gasoline is $5 a gallon!

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Davemart

By December 2013 the Zoe will be produced at an annual rate of 150k units and the Leaf will hit the 250k unit rate. I don’t expect the Zoe’s price to drop at that time but I expect the Leaf will drop by a few thousands USD to perhaps 32k USD for a model that include the fast charging ability.

I recall Ghosn said they would need to make a million units per year as a company (Renault/Nissan combined) in order to be price competitive with combustion vehicles all costs considered. That would still mean EVs that cost more than combustion cars but EVs will be able to make it up over the life of the car because of saved fuel and maintenance costs.

I am very optimistic and think Renault/Nissan could reach the one million target by 2017/2018 or some 3 years ahead of their most relevant competitors, GM, VW Toyota etc. At that time the Leaf may drop to 26 to 27k USD.

Davemart

@Henrik:
First Nissan/Renault have to take out c.5,000 Euros of cost for the elination of subsidy to hold current prices when they expire.
That is what they reckon they need the 500,000 to 1 million a year level for.
After that they will need to reach equality in Europe when they are taxed equally with ICE cars, around another $1,000 a year in costs or so.

They have their work cut out to do that, never mind massive price reductions.
That's why Nissan pooh-poohs talk of greatly increasing range, even though it could be done, technically.

I reckon they may knock the price in the US back down to around where it was when they first introduced it, as that would be the price they thought they needed to reach their sales targets and it is appreciation of the yen that has causeed the rise since, but I think that is about it for several years.

Rising oil prices will do the rest.

JN2

On eBay, this 1.44kWh battery works out at approx $508 per kWh. With FREE shipping!

Link

Account Deleted

I agree, long-range is technically possible as shown by Tesla but all of their 300 miles models start at 80k USD or more so they do not have mass market potential. Not even if Tesla and Panasonic manage to get to 250 USD per kWh for their special type of batteries. They will still need to price their long-range 300 miles vehicles at 60k and more. (40k USD for the car and 20k USD for the needed 80kWh battery).

The only mass market BEV that really makes sense is a 70 to 90 miles range BEV like the Leaf with the ability to charge in minutes in order to deal with range anxiety. I am optimistic that one day we will be able to make a 6000 USD, 24 kWh battery (or 250 USD per kWh) that can be charged using a 100kW or a 150kW charger in order to bring charging times down to 10 to 15 minutes for 60 miles of range. This is in my belief the criterion for the mass market BEV but I think it will not be reached until well into the 2020ies.

For luxury vehicles in the 60k USD and beyond category I think we will see long-range BEVs will become dominant in that market much faster than the development of a mass market for short-range super fast charging BEVs at 26k USD.

Davemart

@Henrik:
My remarks were directed more to the US than Europe, as the battery is bundled into the purchase price there, and cars start off cheaper than in Europe so being competitive is tough.
In Europe battery leasing by Renault makes the picture very different, as when they become available there would seem no reason why bigger packs should not be offered as an option, with the Zoe using the Better Place specification for the battery location and size, which although in itself an expensive waste of time for the swap function means that other batteries should be able to be dropped in as long as they are compliant.
There were rumours that the Zoe was to have 30kwh, which proved false but with energy density improving there would seem no reason why a larger battery should not be offered as an option, perhaps in a Zoe Gordino, the go-faster brand for Renault.

As for charging their Chameleon charger makes fast charging stations cheap as it is AC, and you can do it at 22kw and 43kw.

Up until they decide to equalise taxes electric vehicles have of course a much larger price advantage than in the States.

HarveyD

Since the daily distance traveled is close to or under 35 miles (50 Km) in most cases, the average family could do well with one 100 Km (20 KWh battery) BEV for daily commuting and one 50 e-Km (10 Kwh battery) PHEV or a HEV for mix driving.

One car families would be better off with a HEV or a PHEV for the next 10 to 20 years.

NorthernPiker

The dollars per (nominal) kWh alone is not a sufficient metric to be able to predict general market acceptance of PHEVs or EVs. A $500 per kWh battery that craps out after 500 cycles has a capital cost of $1 per kWh stored, more if its DOD is less than 100%. A better metric for a battery is dollars per kWh of actual storage capability divided by cycle life. An EV will go as far on 1 kWh as a hybrid equivalent would go on 1/10 of a gallon of gasoline, or 1/14 of a gallon of diesel. So, for a given set of assumed fuel and electricity costs, this metric can be used to determine if an EV will never pay back the capital cost of the battery, i.e. it’s an expensive toy (niche market).

For example, a battery, with cost of $397 per useable kWh and a cycle life of 1,500, would have a capital cost of 26.5¢ per cycle. This metric can be applied to specific cases for an EV versus a gas hybrid equivalent, as follows. In the US, with gasoline at $3.70 per gallon and electricity at 12¢ per kWh, each battery cycle will an energy cost saving of 25¢, not enough to cover the capital cost of 26.5¢. However, in England, with gasoline around $7.00 per gallon and electricity about 20¢ per kWh, each cycle yields a energy cost saving of 50¢, which would cover the capital cost and leave a more than adequate 23.5¢ per cycle for financing and maintenance costs.

How adequate? Well, ignoring comparative maintenance costs, and assuming 250 cycles per year, the pay back on the $397 purchase price at 50¢ per cycle would be 794 cycles or 3.18 years on a 6-year life, or a 20% ROI. Interestingly, as I recall, car companies insist that any candidate improvement to a car design, e.g., stainless steel exhaust system, needs to pay for itself within 3 years before it is approved.

It should also be noted that a battery with the same capital cost of 26.5¢ per cycle, but costing 2/3 of $397 per kWh with a cycle life of 1,000, would have a payback of 2.12 years, or an ROI of about 26.5%, excluding maintenance. Furthermore, the replacement battery pack purchased 4 years after the initial battery pack should be better and cheaper than the original pack, particularly if the packs are standardized. So much for USABC’s long life requirement(s), which is seemingly a convenient excuse for automaker foot dragging on EVs.

Arne

NorthernPiker,

"...that craps out after 500 cycles..."

I know of no such battery being offered on any EV. In reality, batteries rarely 'crap out', and when they do, it is usually just one bad module that can be replaced. Nothing to worry about. Don't repeat petrol head FUD ;)

What is the case with batteries is that they gradually lose capacity. For the current crop of EV's this is indeed problematic, since their range is already short (with the exception of Tesla's).

"more if its DOD is less than 100%"

Li-ion batteries deteriorate less when the DOD is smaller. So a battery rated at 2000 cycles for 80% DOD will do something like 10,000 cycles for 40% DOD. Shallow cycles, this is exactly what happens in HEV's.

Future BEV's will have larger batteries and better range which will have 3 positive effects:
1. The average DOD decreases, greatly prolonging the life of the battery
2. Less fast charging is necessary, also reducing deterioration
3. The reduction in range is less problematic since what remains still makes for a perfectly usable car.

Davemart

Anne,
The other side of the coin on DOD is avoiding charging to 100% whenever possible.
Charging schedules have this facility, at least for Nissan/Renault, so when you get your Zoe assuming you are worried about looking after the battery, which you may not since it is leased (;-)), you would do an average day's runaround of 35 mile or so on around 7 or 8kwh.
That means that you could easily usually charge up to 80% and not deplete it below 40% for the majority of the time.
The increasing availability of fast chargers would mean that the risk of running out is suddenly you had to undertake a longer trip would be much reduced.
Under that charging regime the battery is going to last, according to my calculations, absolutely yonks! ;-)

NorthernPiker

Anne,

Thank you for your comments.

The crapping out after 500 cycles alludes to the Telsa battery packs which use LiCoO chemistry for the cathode, the same as laptops and cell-phones.

I also did not include many of the nuances of battery aging such as capacity fading just to keep it simple.

HarveyD

Volts users get between 38 and 1850 mpg after a few months. The majority seems to get over 900 mpg. Those below 100 mpg do not have the ideal driving distance and those below 50 mpg should have HEVs instead of PHEV.

Prius users very rarely have to change the battery pack, even after 500,000 Km. Many of today's Lithium battery pack have not (yet) been optimized to last. Future batteries will last 15+ years with appropriate control and protection ccts.

During the first 40+ years, most ICEs experienced a multitude of problems adversely affecting their duration. It may take 20 to 30 years to have the ideal trouble free battery packs but that day will come.

SJC

It seems to depend on what batteries and how you use them. Honda has had problems with their Civic hybrid software and how the batteries get used. It sounded like the more aggressively they use them to improve mileage the shorter the battery life, which seems intuitive.

Reel$$

Northern Piker may refer to the "bricking" of a single Tesla Roadster when its negligent owner failed to keep the vehicle plugged in over a long storage period. That appears to be about two months starting at 50% SOC according to Tesla.

The Model S battery pack will include a "Deep Sleep" mode, presumably with some kind of Pb backup battery which will reawaken internal electronics even if the pack is totally flat.

The Model S first build of 6,500 units is presold, indicating a healthy appetite for high end EVs. The plan is to build 20k Model S units in 2013. EV market will likely stay this way until pack costs drop under $250/kWh as Henrik suggests.

Tesla plans to unveil a network of 90kW DC supercharger stations which will charge the 85kWh pack in 45 minutes (from 50% SOC.) Supercharging is free for vehicle lifetime with the 85kWh pack, an option with the 60kW pack.

ToppaTom

I like the intellectual shortcuts one can glean from this site.

1. Don’t like the result of some research?
2. Dismiss it; blame it on BIG Oil dollars.

1. Don’t like what the public is buying?
2. Dismiss it; blame it on brainwashing by the BIG 3.

1. Don’t like the slow pace of EV development?
2. Blame it on Chevron and the EV1.

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