Electric Vehicle Battery Prices Dropping Dramatically, Study Finds

As we’ve mentioned a few weeks ago, batteries are the technology that’s holding back pretty much all mobile technologies. That includes the most mobile of technologies, the car.

The thing about electric cars is that the price of the batteries are keeping them premium priced vehicles. That’s not just Telsa (base Model S: $70,000) — a Nissan Leaf starts at $30,000, but a Nissan Versa (a comparable subcompact) starts at about $15,000. A hybrid Toyota Prius can be had for $25,000, but a plug-in model of the same car will cost you at least $30,000.

But that might not be the case for long. The price of batteries may have dipped below the price that was forecast for 2020, dropping at about 8 percent per year. The prices auto manufacturers pay for their batteries are a closely-held secret, but a study found that the actual price is probably much lower than the price energy analysts are using.

Since most of what makes an EV pricey is the price of its batteries, this is big news. At $125 and $300 per kilowatt-hour, batteries hit a “sweet spot” which should appeal to most potential buyers — or, electric vehicle manufacturers could hold their margins and offer longer ranges. Also, since it takes about $10 to charge a battery with 300 miles of range, the savings on a comparably equipped electric and internal combustion vehicles could be seen immediately.

With the commitment of Nissan and Tesla to expand their capacity to build more batteries (see: Tesla’s Gigafactory), prices should drop even more. This should also be true with Toyota, which uses a different battery technology (nickel metal hydride) than Nissan and Tesla (lithium-ion).

Is dinosaur juice on the way out and electrons on the way in when it comes to transportation? Stay tuned.

Nature Climate Change via MIT Technology Review. Photo by Paul Krueger/flickr.