Report shows EV battery prices had fallen 87% in nine years to 2019
Tue 07 January 2020
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Electric vehicle battery prices, which were over $1,100 per kWh in 2010 had fallen 87% in real terms to $156/kWh in 2019 according to a report by Bloomberg New Energy Finance (BNEF). They are forecast to be close to $100/kWh in 2023 when, they say, EVs should be close to achieving purchase cost parity with their ICE counterparts. Meanwhile, a separate study suggests that EV battery degradation is slower than is commonly perceived.
According to BNEF’s 2019 Battery Price Survey, 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 survey says that the introduction of new pack designs and falling manufacturing costs will drive prices down in the near term.
Logan Goldie-Scot, head of energy storage at BNEF, said: “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.”
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. 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.
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. However, as cell and pack prices are falling, purchasers will get more value for their money than they do today.”
BNEF's report says that as we get closer to the second half of the 2020s energy density at the cell and pack level will play a growing role, 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.
LowCVP analysis has found that when fuel savings are included in the calculation, EVs are often already cheaper overall, over a typical three or four year ownership period, despite the initial price premium.
A separate study by US-based telematics firm, Geotab, of over 6,000 EVs found that on average EVs lose less than 2.5% of their battery capacity each year. Their report explains that degradation is at its highest in the first and last stages of charging and by building in a low and high battery buffer, the condition of the cells is maintained as well as can be. whilst EV batteries will see an initial drop-off in performance, that rate of degradation slows very quickly thereafter.
Other key findings from the Geotab survey were:
- Liquid-cooled batteries decline slower than air-cooled ones, with the former degrading almost half as slowly in some circumstances.
- The UK's cool climate means that we're well-placed to benefit from longer battery life as EV power packs prefer cooler temperatures.
- Frequent DC fast charges speed up degradation, but as the input level increases, the comparative rate doesn't. More to the point, in cooler places the decline isn't as bad during DC fast charging.
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