BNEF annual Li-ion battery price survey finds prices fell 13% from 2018 to average $156/kWh in 2019
04 December 2019
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).
Cost reductions in 2019 are thanks to increasing order size; growth in battery electric vehicle sales; and the continued penetration of high energy density cathodes. The introduction of new pack designs and falling manufacturing costs will drive prices down in the near term.
BNEF’s 2019 Battery Price Survey, published at the BNEF Summit in Shanghai, predicts that as cumulative demand passes 2 TWh 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. The report further examines in detail how manufacturers and automakers alike can continue to reduce prices.
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. However, as cell and pack prices are falling, purchasers will get more value for their money than they do today.—James Frith, BNEF’s senior energy storage analyst and author of the report
Annual lithium-ion battery market size. Source: BloombergNEF
BNEF’s analysis finds that as batteries become cheaper, more sectors are electrifying. For example, the electrification of commercial vehicles, such as delivery vans, is becoming increasingly attractive. This will lead to further differentiation in cell specifications, with commercial and high-end passenger vehicle applications likely to opt for metrics like cycle life over continued price declines. However, for mass market passenger EVs, low battery prices will remain the most critical goal.
Continued cost declines for batteries in the 2020s will be achieved through reduced manufacturing capital expenditures, new pack designs and changing supply chains.
Factory costs are falling thanks to improvements in manufacturing equipment and increased energy density at the cathode and cell level. The expansion of existing facilities also offers companies a lower-cost route to expand capacity.—Logan Goldie-Scot, head of energy storage at BNEF
As major automakers start to produce bespoke EV platforms, they are able to simplify pack design and standardize across different EV models. The simplified design is easier to manufacture and can be scaled for larger or smaller vehicles. The change in pack design will also allow for simpler thermal management systems and could reduce the amount of housing required for each module. As automakers start procuring cells from multiple suppliers for a single platform, there is also an increasing level of standardization in cell design.
EV demand in Europe is growing, and supply chains are changing. Increasingly, battery manufacturers are building plants in the region. This helps to reduce some of the costs associated with importing cells from overseas, especially transportation costs and import duties.
BNEF says that 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—not because it is impossible but rather that there are a variety of options and paths that can be taken.
As we get closer to the second half of the 2020s energy density at the cell and pack level will play a growing role, BNEF says, as it allows for more efficient use of materials and manufacturing capacity. New technologies like silicon or lithium anodes, solid state cells and new cathode materials will be key to helping cost reductions play out.
OP> By 2023, average prices will be close to $100/kWh, according to the latest forecast from research company BloombergNEF (BNEF).
At that point, battery prices will be 9% of what they were in 2010. A 60kWh battery, nominal for 200+ miles range on a car with an efficient CoD, will cost ~$6,000.
MIT's recent "Insights into Future Mobility" described typical 2017 ICE drivetrain cost as $4,500:
"For the representative ICEV, we use a 2017 model year VW Golf. Its ICE powertrain is made up of combustion engine parts ($1,700), combustion engine auxiliaries ($1,370), transmission ($600), exhaust system ($520), and engine control unit/ sensors ($310) (Hummel, et al. 2017). This yields a total propulsion system cost of $4,500. The VW Golf has a gasoline turbocharged engine using direct injection; the cost of the powertrain accounts for about 20% of the entire car price."
Posted by: electric-car-insider.com | 04 December 2019 at 04:12 PM
Typical EV drivetrain not including battery was $3,800:
"For the representative BEV, we use a 2017 model year Chevy Bolt. Its electric propulsion system is made up of an e-motor, including an integrated single-speed transmission ($800); other components of the e-drive module (besides the e-motor), such as motor housing, gear train, resolvers, etc. ($400); an invert ($700); and other parts1 ($1,900) (Hummel, et al. 2017). Thus, the cost of an electric powertrain, excluding the cost of the battery pack, was estimated to be $3,800, 16% lower than the cost of a full ICE powertrain
at $4,500. We use the market-average price for a battery pack in 2016 from Hsieh, et al. (2019): $289/kWh, which assumes lithium-ion nickel manganese cobalt chemistry matching the dominant battery technology for vehicle applications in model year 2017."
Posted by: electric-car-insider.com | 04 December 2019 at 04:12 PM
Assuming a nominal $100 per month fuel cost savings, the breakeven TCO is 4.4 years.
Over the next 10.6 year life of the car, the fuel cost savings is another $12,720. Add $1,200 in oil change and $1,800 in tuneup savings and the EV is $15,720 cheaper to own and operate.
$15,720 is nearly half the cost of the average new vehicle (46%).
That's a pretty compelling argument to drive an EV.
Posted by: electric-car-insider.com | 04 December 2019 at 04:19 PM
You've omitted to add the costs to the ICE suffered due to climate change for which we all pay for (taxpayers contribution); some with their lives. Add everything together and the argument for EVs becomes even more compelling.
Posted by: yoatmon | 05 December 2019 at 04:16 AM
Completely agree. The first financial analysis completely omits the negative externalities of extracting and burning hydrocarbons, and using the atmosphere as an open sewer.
You just can’t reach some people, except through the wallet and pocketbook.
The above example also ignores the additional savings of clean vehicle federal tax credits, which add another $7,500 in the US, and $10,000 total including state rebate in the two most populous states in the US.
The first example also ignores asymmetrical manufacturer dealer discounts.
$10,000 discounts have been available at various times over the past few years in the US on: Nissan Leaf, BMW i3 and Jaguar i-Pace.
Posted by: electric-car-insider.com | 05 December 2019 at 07:53 AM
If you are able to get the discounts, rebates, tax credits and fuel cost savings described, the total savings of EV vs ICE is $35,720 assuming a $3,800 EV purchase premium at point of sale.
I was able to get $10k discount on an I-Pace and BMW i3. You can find these EV discounts if you look and are not in a hurry to purchase.
Posted by: electric-car-insider.com | 06 December 2019 at 09:06 AM