IHS Markit: average cost of lithium-ion battery cell to fall below $100/kWh in 2023
24 September 2020
The average cost of a Li-ion battery cell—used to power electric vehicles and to provide flexibility in the power grid as more renewables, such as solar and wind, are added will fall below $100 per kilowatt hour (kWh) in the next three years, according to a new analysis by IHS Markit.
The average cost of a li-ion cell is expected to decline further through the end of the decade, to as low as $73/kWh in 2030.
The average cost of a lithium-ion (Li-ion) battery has already fallen 82% from 2012-2020. Further reductions are a key factor to increasing the competitiveness and wider adoption of the batteries for electric transportation and in grid storage.
By 2023, the cost of a battery will have declined 86% (by $580/kWh) in a decade, according to the IHS Markit analysis.
IHS Markit expects that the biggest contributor to falling battery cell costs throughout the coming decade will be reductions in manufacturing costs through larger factory sizes and improving economies of scale. Reductions in material costs by improving efficiencies and adopting lower cost cathode compositions, and improvements in battery energy density are also expected to play a role.
Among the three major Li-ion battery cells—Nickel Manganese Cobalt (NMC), Nickel Cobalt Aluminum (NCA) and Iron Phosphate (LFP)—LFP has already fallen below the $100/kWh threshold in 2020. All three types are expected to be below the $100 mark by 2024.
LFP will remain the lowest cost option throughout the next ten years. However, NMC and NCA will continue to command a majority share of the automotive and transport sector on account of their higher energy density.
Cost is the name of the game. Technology advances and competition between the different types of lithium-ion batteries is driving prices down. Ultimately, the two major growth markets—transportation and electric grid storage—depend upon lower costs to make batteries more competitive with the internal combustion engine and fossil fuel power generation.—Youmin Rong, senior analyst, clean energy technology, IHS Markit
OK, lets hope this happens.
What I find galling is where consultants say that batteries will cost $150 ; kWh and you go to buy a Tesla powerwall and it costs $6500 for 13.5 kWh or ~$480 / kWh.
I know there is more than just batteries in one of these, but 3x cost seems a bit much.
I assume the competitors charge the same.
This suggests to me that energy storage should be done at grid or at least commercial scale as domestic sized batteries have way too high overheads.
What you need is to be able to buy virtual kWh in a grid scale battery and use these to enable you to time shift your solar power for free on the grid.
So instead of paying $6500 for 13.5 kWh, I pay (say) $2700 for 13.5 kWh of virtual batteries "somewhere" on the gird. This would then allow me to push 13.5 kWh into the grid each day while sunny and take it back out for free, (or some very low rate, say 1c/kWh). (Or do day / night rate shifting if there is no sun).
Another advantage would be that someone else had to maintain it.
A disadvantage would be that it wouldn't work in a power cut.
Posted by: mahonj | 24 September 2020 at 02:21 AM
And worse, the Tesla Powerwall has the cells not quite good enough for a car, in other words "junk". That's why Musk is a genius!
Zinc batteries are only over $100/kWh because nobody has ordered enough of them yet.
Speaking for me, I'd prefer to not own hardware so if a utility wants to charge me to maintain the panels and the batteries, I'm fine with that.
Posted by: Albert E Short | 24 September 2020 at 09:43 AM
You'd think that $100 refers to the cost to produce? or ex factory? . Passing through several hands shipping taxes and turning into product before sitting in a wholesale or retail showroom and sold singly costs escalate hardly surprising. All the mouths to feed along the way.
Posted by: Arnold Garnsey | 24 September 2020 at 04:41 PM