Batteries volt-battery

Published on April 18th, 2012 | by Christopher DeMorro

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Battery Prices Have Fallen 30% Since 2009

Though it seems like forever ago, the world is a much different place from 2009. Osama Bin Laden is dead, The News Of The World is no more, and electric cars are hitting the streets in ever larger numbers. Another big difference? Since 2009, battery prices for electric vehicles have fallen a whooping 30%…but don’t expect to see savings until the next-generation of vehicles.

Seeing as how battery prices are the number one driver of EV costs, seeing prices drop by 30% over just three years is rather amazing. In cars like the Tesla Roadster, the battery pack costs up to $40,000. Even in cars with smaller packs like the Chevy Volt, the battery makes up a disproportionate amount of the price. Translation; a 30% reduction in battery costs can shave thousands of dollars off the cost of electric vehicles.

Here’s the thing though; it takes a long time to develop and build a car. The Chevy Volt first hit the stage as a concept way back in 2007. The Nissan Leaf first appeared in production dress in 2009, though you can bet both GM and Nissan were already hard at work on the NEXT generation of their respective vehicles before the first ones ever left the factory.

Now I’m not sure the exact pace of things, but I do expect the next generation of the Leaf and Volt to try and shave a few grand off the price. Either that, or they may offer less range with a smaller battery for a lower price, because it is obvious to everyone that the high cost of entry is keeping EV sales rather limited.

At a rate of 10% price decreases per year though, by 2020, battery prices could be just ⅓ of what they are today. On the same token, there have been dozens, if not hundreds of studies trying to predict how fast and how far battery prices will go. And frankly, I just don’t trust studies.

But the facts speak for themselves, and battery prices HAVE come down a significant amount in a relatively short time. If battery makers can continue to bring the cost down then a lot of the arguments against electric vehicles just sort of…disappear. I hope one day that electric vehicles will hold a premium of no more than $5,000 over their gas-powered cousins, and that will come with extra features that automakers like to load up on top-level vehicles.

But maybe $5,000 is still too much. You tell me what, if any, price premium electric vehicles should carry.

Source: Bloomberg



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About the Author

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or esle, he's running, because he's one of those crazy people who gets enjoyment from running insane distances.



  • http://tem@tkindustrialdesign.com Tem Kuechle

    There is a certain point where batteries cannot cost anything less. At that point we will know how much they cost. All the studies are estimates about an unknown future price, which is just gambling. I think that the details have not been illustrated properly to make strong arguments for or against EVs. Right now there are many opinions that tend to be divisive and unsubstantiated, so they are not facts, although the discussions about these topics can be entertaining at best. Even Argonne’s recent paper has gapping holes, where there is still a lot of information to gather and analyze. The fact is we really don’t know if the price premium is really a premium relative to the future annual fuel costs for an ICE based vehicle. In the past year I have seen only bits and pieces of arguments for and against EVs, but nothing conclusive either way. My gut feeling is that EVs are the future, whether or not they use solid State fuel cells that require a liquid/gas, or charging batteries, or an efficient generator to make electricity, it all says electric will be turning the wheels of millions of vehicles in my lifetime and my children’s lifetimes, not pistons.

    • T Adkins

      The study does want to say that by 2020 batteries will be 1/3 the price they are now if things go as they are sure that could be far fetched but prices have already come down 30% of cost in just the last 3 years. We have also seen in the US gas at the pump go from under $3 to over $4 or an over 30% increase.

      Coal is just about as dirty a fuel as gasoline but we dont import our electricity and less than 50% of power in the US is made from coal, which should make fueling the car from the plug and not the pump cleaner.

      With the US importing over 60% of the oil we use means the for every $1 we pay for oil $0.60 is leaving the US and some of it goes to places that dont like us but like our money, but when we spend $1 from power made here in the US that $1 will change hands in the US and help move the economy of this country without a large portion of it going to say a “we-dont-like-the-US-Far.off.istan” economy.

      Not too sure how many more reasons you need. The cost for an EV really needs to come down and they are. Just using the numbers presented in this article if you take the Tesla a car that is over $100,000. where the battery pack is $40,000 a cost reduction of 30% to just the battery is over 10% of the car cost.

      You feel that in your lifetime and your children’s lifetime, that electric will be turning the wheels of millions of vehicles. That time is already here we have been living it, ever have a train hold up traffic those are electric, giant dump truck so big it could carry a house -electric, subway/light rail also electric. Then we have bicycles, motorcycles, motor scooters, submarines, escalator, elevator, bumper cars, golf cart, buses in cities like San Fransisco, also electric. Prius has sold over 1million in the US, then you will have sales around the world, Volt and Leaf are new and both have over 10,000 sold. So electric is already moving many wheels of many vehicles. We have electric planes, electric UPS/FedEx/Pepsi trucks.

      Electric is all around us everyday we are just finding new ways to power it and store that power, and then put it in the garage of everyone that wants one as it fits their needs.

  • t_

    Hi Tim,
    As it seems, oil is reaching its peak, or maybe reached already. An from this point the price is only going up. Despite that, oil is traded on the stock markets and as it seems, there are so many factors, that bring the prices up. On the other hand, electricity prices are usually subject of longer lasting contracts, even if it is a matter of intrgovernmental contracts. The prices of most of the electricity sources – coal, atomic energy usually do not fluctuate so much becouse of the war in Iraq or eventually Iran. Natural gas is going down for now, renewable energy also. Here are some reasons for the electric vehicles.

  • John

    I think you mean “whopping” not “whooping”.

  • Geo

    When gas is $5/gallon, you could easily save a few hundred a month on fuel costs alone. A $5000 difference in price could pay itself off in a few years. But don’t forget that an EV will probably have a higher resale value, so you could probably get a few thousand more back when the car is sold. This adds more to the value of an EV.

    Right now, a Leaf with a $350-400/month lease and $150-200/month in gas savings is about the same monthly cost as a Versa lease. In a few years, as gas prices rise and battery prices drop, EVs will have a definite cost advantage and people will start switching in larger numbers.

  • Christopher G

    Here’s a fun tool to see your savings EV vs. gas:
    http://www.codaautomotive.com/electric-car-impact-calculator/

    And that is just the savings on the cost of gas ALONE. Most people seem to not get it yet:
    1. NO oil changes, filters, belts, spark plugs, etc
    2. Much less moving parts – less friction, wear n tear, less heat/inefficiency
    3. NOT having to go to a “special place” to get energy source out of some pump… and end up with a hand smelling like petrol
    4. Convenience & time: Like a cellphone w wheels. Simply charge up, use throughout the day, come home, plug it in, and it’s ready to go again the next day. No having to make a trips to designated places to get energy, wait in line, process payment, wrangle with some filthy pump, etc. How much productive time is collectively wasted fueling up at gas stations? That’s certainly worth something and needs to be included in calculation.
    5. MUCH greater efficiency vs gas cars ~85% of gas put in tank does NOT achieve mobility and is simply wasted on friction, heat, noise, and energy spent counteracting these dynamics
    6. NO oil stains on driveway, roads, in garage, etc
    7. For now, special car pool lane stickers – time savings on traffic congestion
    8. Obviously, the good-feeling of being greener and more efficient
    9. Now if we can just get rid of those damned nasty coal-fired power plants

    Don’t get all the hand wringing over “EVs are so expensive”. Yes, there’s much more of a premium now compared to later when there is larger economies of scale, battery prices move along a Moore’s Law type of curve, etc. BUT, even now, the cost of EVs is pretty damn compelling when all advantages are factored in.

  • Jerry

    Disagree with Geo. My biggest concern is the resale value, knowing the main part of the electric car, the battery have limited life time. EV won’t have good sale value. When we are talking about the saving on gas, did we consider the depreciation of the battery, due to both the life span and the obsolete technology.

  • Will

    Pretty sure it’s whopping, not whooping. Whopping = big. Whooping = a noise you make, a type of crane, or a type of cough.

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