EV Battery Cost Falling Faster Than Predicted

5194 Views 9 Replies 8 Participants Last post by Ambulator, May 10, 2015

larry4pyro

Discussion Starter · May 5, 2015

Nice little interview with Chelsea Sexton on batterys and their declining costs. Summary, the future for EVers look bright.

http://www.autoline.tv/journal/?p=37423

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Good find. Elon has the battery cost thing in sight. @$125/kwh EVs become competitive with ICE cars for a large slice of the driving public. Chelsea thinks that number is $250 and she may be right with EV lower maintenance costs vs a 4-cyl ICE.

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pcons

· #3 · May 5, 2015

Loboc said:
Good find. Elon has the battery cost thing in sight. @$125/kwh EVs become competitive with ICE cars for a large slice of the driving public. Chelsea thinks that number is $250 and she may be right with EV lower maintenance costs vs a 4-cyl ICE.

Interesting, I was figuring we were already around the $200/kWh mark for battery cost. The Tesla home battery @ 10 kWh COSTS 3500, which averages to $350/kWh, and that's sell price, not mfg cost. There is certainly a lower battery cost tied to that since the 3500 has to include other components, profit/markup, etc....also I think I recall seeing a volt replacement battery runs something in the area of 3500, and that's for a 17.1 kWh battery (now that may be subsidized)...but assuming no subsidization, that 'cost' is already ~$200/kWh.

We had a discussion along these lines last week at work with the Tesla announcements, and a few others here were 'guessing' that we should already be at the $200/kWh mark.

Regardless, one thing to agree upon is costs are very soon going to be approaching the price for 'mass market' use. Going to be exciting times moving forward.

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viking79

· #4 · May 5, 2015

I think at $250 EVs could become a lot more common, at $125 they could become huge since it would be cheaper than gas. Battery cost is currently the largest barrier to EV cost value, not energy prices.

If I drive a Tesla 150,000 miles electricity might cost $10,000 at $0.26 per kwh or $5000 at $0.13 per kwh guessing 3.5 miles / kwh, or about 10% the cost of the vehicle. Even if you averaged an excellent 25 mpg for that class of vehicle in a Tesla at $3/gallon it would be about $18,000 for gasoline. So energy cost for electric is notably cheaper, even at fairly high rates, but you have the darn battery to consider.

At $500 / kwh the battery in the Tesla S 85 kwh model costs about $42,500 or at $125 / kwh about $10,000. Now, at $10,000 for the battery and if only average of $0.13 per kwh, we are cheaper to run electric than gas, including the battery expenses. I say $250 will gain acceptance, not because it will be cheaper than gas, but rather it will be close enough to gas that people will be fine with it. At this price you could phase out tax incentives and such.

Anyway, I am amazed at how quickly battery electronics have changed since Li-Ion batteries have become mainstream (drones, RC vehicles, EVs, Smartphones, etc).

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Sheldon

· #5 · May 5, 2015

pcons said:
Interesting, I was figuring we were already around the $200/kWh mark for battery cost.

Today, 2015, we're at $280/kwh, heading towards $235/kwh in 2017/2018
Maybe 2019/2020 would be $200/kwh

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pcons

· #6 · May 5, 2015

Sheldon said:
Today, 2015, we're at $280/kwh, heading towards $235/kwh in 2017/2018
Maybe 2019/2020 would be $200/kwh

Agreed, that's what the video clip said...the thing that confuses me then is how Tesla can sell a 10 kWh model for $3500. @ 280 mfg cost per kWh that would imply there is $2,800 worth of battery in the Tesla home battery, and there is more in the Tesla battery than just the battery (there is the thermal management system, enclosure, etc)....Even if you assume these things cost $0, thats a pretty terrible profit margin ($700/$3500 = 20%)....a 20% profit margin (and admittedly, its likely lower than this even) is pretty terrible, and on products we make at our company below 20% profit margin doesn't even get past internal review and the project is very likely killed.

I'm not disagreeing with the figures quoted in the video, but just trying to reconcile this vs examples out there in the market now (which is why I mentioned the Tesla battery and volt replacement battery).

In any event, I'm not in the market for a Tesla home battery, and (hopefully) wont have to replace my volt battery any time soon

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viking79

· #7 · May 5, 2015

That is just the battery, I imagine profits are made on inverter and maybe tax incentives. Tesla's figure for $280 / kwh sounds low too, does that include incentives? Average cost of Li-Ion last year was closer to $400. They do say market leading firms are around $300, but how much of that is subsidized? I don't know, it doesn't say.

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Neromanceres

· #8 · May 5, 2015

pcons said:
Agreed, that's what the video clip said...the thing that confuses me then is how Tesla can sell a 10 kWh model for $3500. @ 280 mfg cost per kWh that would imply there is $2,800 worth of battery in the Tesla home battery, and there is more in the Tesla battery than just the battery (there is the thermal management system, enclosure, etc)....Even if you assume these things cost $0, thats a pretty terrible profit margin ($700/$3500 = 20%)....a 20% profit margin (and admittedly, its likely lower than this even) is pretty terrible, and on products we make at our company below 20% profit margin doesn't even get past internal review and the project is very likely killed.

My thought is Tesla could be just out to get these on the market for now at low or no margin with a limited roll out. When the giga-factory is up and running then their costs will drop increasing their margin.

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Dave86

· #9 · May 5, 2015 (Edited)

Good link.

Chelsea's numbers were as follows:

2007: $1000/kwh
2015: $280/kwh
2017-18: $230/kwh

She has battery prices falling an average of 14.7% per year from 2007 through 2015. Assuming that batttery prices continue to fall at that rate through 2025 (and neglecting her price projections for 2017-18), prices will be (per kwh):

2007 $1000.00
2008 $852.89
2009 $727.43
2010 $620.42

2011 $529.15
2012 $451.31
2013 $384.92
2014 $328.30
2015 $280.00

2016 $238.81
2017 $203.68
2018 $173.72
2019 $148.16
2020 $126.37

2021 $107.78
2022 $91.92
2023 $78.40
2024 $66.87
2025 $57.03

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Ambulator

· #10 · May 10, 2015

The Tesla Powerpack is listed at $250/kWh, so I think Tesla's price is less than that.

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