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Power The Almighty Buck Transportation Technology

Electric Car Battery Prices Fell By 80% In the Last 7 Years, Says Study (electrek.co) 212

An anonymous reader quotes a report from Electrek: A new study published this month by McKinsey and Company looks into how automakers can move past producing EVs as compliance cars and "drive electrified vehicle sales and profitability." Unsurprisingly, it describes battery economics as an important barrier to profitability and though the research firm sees a path to automakers making a profit selling electric vehicles as battery costs fall, it doesn't see that happening for "the next two to three product cycles" -- or between 2025 and 2030. That's despite battery costs falling from ~1,000 per kWh in 2010 to ~$227 per kWh in 2016, according to McKinsey. The company wrote in the report: "Despite that drop, battery costs continue to make EVs more costly than comparable ICE-powered variants. Current projections put EV battery pack prices below $190/kWh by the end of the decade, and suggest the potential for pack prices to fall below $100/kWh by 2030." Automakers capable of staying ahead of that cost trend will be able to achieve higher margins and possible profits on electric vehicle sales sooner. Tesla is among the automakers staying ahead of the trend. While McKinsey projects that battery pack prices will be below $190/kWh by the end of the decade, Tesla claims to be below $190/kWh since early 2016. That's how the automaker manages to achieve close to 30% gross margin on its flagship electric sedan, the Model S. Tesla aims to reduce the price of its batteries by another 30% ahead of the Model 3 with the new 2170 cells in production at the Gigafactory in Nevada. It should enable a $35,000 price tag for a vehicle with a range of over 200 miles, but McKinsey sees $100/kWh as the target for "true price parity with ICE vehicles (without incentives)": "Given current system costs and pricing ability within certain segments, companies that offer EVs face the near-term prospect of losing money with each sale. Under a range of scenarios for future battery cost reductions, cars in the C/D segment in the US might not reach true price parity with ICE vehicles (without incentives) until between 2025 and 2030, when battery pack costs fall below $100/kWh, creating financial headwinds for automakers for the next two to three product cycles." UPDATE 2/3/17: We have changed the source to Electrek and quoted McKinsey and Company -- the company that conducted the study.
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Electric Car Battery Prices Fell By 80% In the Last 7 Years, Says Study

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  • start that diy project on some modded sports car...
    • The problem is, all the really light gas cars are cramped AF. If you could get your hands on a 240Z (they were still cheap ten years ago, but not so much now) that would be a good choice, they are only about 2150lb. The 240SX is 2750! MR2s are light, but they are also miniature. Or you could go even further back and look at a Fiat roadster. That would also be super cramped but it would be light.

  • omg proof reading (Score:3, Insightful)

    by Anonymous Coward on Friday February 03, 2017 @06:13AM (#53793977)

    "produced at 227 kWh per kWh in 2010"

    "will be $ 190 per kWh and $ 20 per kWh less than $ 100 per kWh"

    wtf?

  • Wait, what? (Score:4, Insightful)

    by edx93 ( 4858619 ) on Friday February 03, 2017 @06:14AM (#53793981)
    > we can see that the same batteries can be produced at 227 kWh per kWh in 2010...
    And it's in the original article, too. Someone needs a new editor...
  • by hattig ( 47930 ) on Friday February 03, 2017 @06:33AM (#53794017) Journal

    God, is it so hard to write:

    "In 2010 an electric car battery cost $x per kWh and usually had capacity y kWh, and by 2020 this will be $x' and y'."

    • by esperto ( 3521901 ) on Friday February 03, 2017 @06:47AM (#53794043)
      This summary is unreadable, it literally makes no sense.
      • by SimonInOz ( 579741 ) on Friday February 03, 2017 @08:34AM (#53794313)

        >> This summary is unreadable, it literally makes no sense.
        Sadly, it's a direct quote from the original - completely incomprehensible - article.

        See, some people actually RTFA.

        • See, some people actually RTFA.

          A witch! Get her! Drown her!

        • >> This summary is unreadable, it literally makes no sense.
          Sadly, it's a direct quote from the original - completely incomprehensible - article.

          See, some people actually RTFA.

          And this is why the rest of us don't.

      • This summary is unreadable, it literally makes no sense.

        Look, fifth grade teachers need to make a living. If that means plagiarizing their student's science reports and selling them to online new services, so be it. We do not need our teachers starving. The last thing we'd want to do is actually pay them ourselves!

  • $100 per kw hour is $3,000 for a Nissan Leaf battery. Is that production or retail? If the expected battery lifetime is 8-10 years then that is a lot to spend on an old vehicle
    • I pay for fuel ~ 1000€ a year for commute only. If a battery lasts for 8 years and pays back in 5 years, It's a good deal.

    • by DrXym ( 126579 )
      Don't worry, the Nissan Leaf will be obsolete before that. It uses a CHAdeMO standard for charging the vehicle. The US is adopting type 1 CCS and Europe is adopting type 2 CCS. That leaves the Leaf and a handful of other models in the lurch. I expect you'll be lucky in 8 years to see any charging station support the format. If it works at all it'll be through some expensive active cable that converts the supply to CHAdeMO or through a refit program.
      • Don't worry, the Nissan Leaf will be obsolete before that.

        Good. The Nissan Leaf is fugly, and only serves to make the average person less likely to look into buying an electric car. They need to go away.

    • by MrL0G1C ( 867445 )

      If the expected battery lifetime is 8-10 years then that is a lot to spend on an old vehicle

      That'd basically depend on mileage.
      And $300 per year for a car with lower maintenance costs doesn't sound too bad. And in 10 years the batteries will be cheaper again and probably half the size and weight too (already invented x2).

    • No number for Leaf.

      Current Renault Zoé (based on the same platform, but a Renault Clio body bolted on it) :
      41kWh :
      - costs ~9'000$ approx when you decide to buy the battery with the car (as opposed to rent one)
      - costs ~15'000$ if you decide to buy a new one later on (because you initially opted renting one instead).

      According to the summary : that battery would cost ~4100$ approx to built.
      (Given that the company need to recoup its R&D costs, and the various subcontractors making the batteries (LG Ch

    • The retail threshold for batteries to be logical used to be at $350/kWh in stationary applications; mobile applications used to be primarily concerned by weight. If we can get battery costs (of multiple technologies) at a retail price point under $200/kWh then a lot of very interesting applications start to open up.

      I do hope sufficient effort does go into diverse materials and technologies though, rather than just a focus on cost.
  • New tech... (Score:4, Insightful)

    by Freischutz ( 4776131 ) on Friday February 03, 2017 @06:37AM (#53794033)
    It's starting to look as if electric cars and clean energy may actually be manage to kill off the fossil fuel industry in the foreseeable future. Will not be shedding any tears when that happens. This would also explain why Trump is in such a hurry to eradicate the EPA. If the price of clean energy keeps falling, eventually the only way Oil and Coal will be able to compete is if they do not have to respect any environmental legislation and the Trump admin fixes it so that they can pollute at will. Once the price of clean energy and electric vehicles falls below even the prices they can offer under those circumstances Oil and Coal will be in trouble. But then again who knows, maybe we will actually see numbers rivalling the women's march hitting the streets to protest the murder of the EPA in which case this may happen even sooner.
    • It's starting to look as if electric cars and clean energy may actually be manage to kill off the fossil fuel industry in the foreseeable future. Will not be shedding any tears when that happens.

      If they write TFS to sell it like this shit one, someone's gonna be crying. Likely the salesman.

    • i doubt it'll kill off the the fossil industry because there will too many old cars a still running that need it. But there could be tipping point when there will be a stock of fuel that will need to be sold off really cheap.
      • by rikkards ( 98006 )

        That's ok, just like guns, you won't need to have an ICE car so they will just introduce more hoops to jump through to keep any existing models and probably a special license involved because you know fuel is highly flammable and all that..

        • Re:New tech... (Score:4, Interesting)

          by jabuzz ( 182671 ) on Friday February 03, 2017 @09:35AM (#53794553) Homepage

          Not really what will do for the ICE car is fuel availability. Here in the UK we have gone from 37,500 filling stations in 1970 to 8,600 bu 2013 with further contractions since then. Heck by 2011 due to more fuel efficient cars and a recession we where burning less fuel in ICE than in 1970.

          Basically "petrol stations" as we call them here operate on very thin margins, with many only profitable due to the shop they run. As the number of electric cars increases the demand for fuel will further fall, so more stations will close. This will then start having a network effect making electric cars ever more attractive because you don't need to go searching for a pump to fill up your ICE.

          The average age of a passenger car in the EU is only 8 years (its a lot more in the USA. at nearly 12 years) which means that once it starts it will be very rapid, and my prediction is that average age of cars will start dropping as people ditch the ICE due to the hassles of filling up.

      • i doubt it'll kill off the the fossil industry because there will too many old cars a still running that need it. But there could be tipping point when there will be a stock of fuel that will need to be sold off really cheap.

        I'm not expecting this to happen next year but it now looks likely to happen in my lifetime. It takes about 10-15 years for 50% of the car fleet to age out and get renewed. I'd expect that after the tipping point we could see the majority of cars being electric within 30 years or so of the tipping point. You can try to keep electric cars down by dumping fuel and make fossil fuel cars cheaper but that just depletes the oil deposits faster. Eventually oil companies will have to dip more and more into hard to

    • Re: (Score:2, Offtopic)

      by DrXym ( 126579 )
      Trump spouts what he does because the oil and coal industry have learned to massage his ego. The solar industry should learn to do likewise. Be totally obsequious, pander to his narcissism and all of sudden he'll be parroting how amazing solar and renewables are.
    • by AmiMoJo ( 196126 )

      I expect there will be huge lawsuits. There is plenty of evidence that pollution damages health, so lawsuits will challenge both the legality of allowing high levels of pollution and the companies doing the polluting.

      Unfortunately Trump is going to stack the Supreme Court in his favour.

      As usual, the lawyers will win either way.

      • by swb ( 14022 )

        So you run a factory or other facility, you meet all regulatory requirements on emissions and have a track record of excellent compliance (no evidence of cheating, mistakes, etc).

        On what basis can you be sued? Sure, some evidence may turn up in the future that your emissions at 25 ppm are actually unsafe and make people sick, but if you don't know that and all laws and regulations allow for 25 ppm, but should you be liable for something that was otherwise legal and not known to be unsafe?

        • by AmiMoJo ( 196126 )

          Like smoking, just because it is legal doesn't mean you can ignore the knowledge that it's harmful.

    • It's starting to look as if electric cars and clean energy may actually be manage to kill off the fossil fuel industry in the foreseeable future

      I suppose that depends on what your definition of "foreseeable" is. Quite frankly I don't see it happening during my lifetime and according to actuarial tables I probably have around another 30-40 years left.

      Here is what I I do see as possibilities/likelihoods within the next 40 years. Politics could obviously interfere with any/all of this
      1) Hybrid and electric cars take major amounts of market share. They won't eliminate internal combustion engines but they will substantially mitigate their impact. If

      • by radl33t ( 900691 )
        seems like flawed predictions that don't account for compounding growth
      • Re:"Foreseeable"? (Score:5, Informative)

        by Freischutz ( 4776131 ) on Friday February 03, 2017 @10:19AM (#53794837)

        It's starting to look as if electric cars and clean energy may actually be manage to kill off the fossil fuel industry in the foreseeable future

        I suppose that depends on what your definition of "foreseeable" is. Quite frankly I don't see it happening during my lifetime and according to actuarial tables I probably have around another 30-40 years left.

        Here is what I I do see as possibilities/likelihoods within the next 40 years. Politics could obviously interfere with any/all of this 1) Hybrid and electric cars take major amounts of market share. They won't eliminate internal combustion engines but they will substantially mitigate their impact. If charge times can be made less than 10-15 minutes, electric vehicles will dominate market share in passenger vehicles. Luxury cars will mostly be hybrids within 10-15 years and the technology will trickle down from there.

        I think this evolution will be much faster in Europe. Hybrid cars are fairly common here and if, as you mention, it were possible to charge a pluggable hybrid up in 10 minutes and get 100 km out of it at a speed of around 100 km/h I'd definitely buy one. In fact the last time I was in the market for a car the only reason I did not buy a hybrid was that no pluggable ones were available. I'd do about 80-90% of my driving, commuting to work and running errands in electric mode on a car like that. If electric cars could be had with a charge time of 10 minutes and a subsequent range of ~3-400 km and if the charge station infrastructure was in place I'd buy one in a heartbeat and never look back.

        2) Solar roofs will become a thing on high end houses and many commercial buildings. (added benefit of greater system reliability)

        Having spent significant time driving through Germany and Denmark for over a decade I can tell you this is already a very common sight there, even on quite normal residential buildings. I actually had trouble finding a farm in Jutland and Schleswig-Holstein where the farmer hand't either set up a battery of wind turbines, covered every available roof with solar cells or done both. Stereotypical farmers are supposed to be a conservative lot but seeing them embrace new technologies with such enthusiasm leads me to doubt that.

        3) Wind farms and industrial scale solar become an increasingly important part of our energy portfolio. Probably not the majority but 30%+ is realistic. 50%+ is possible.

        The Germans are already at ~28% and are aiming for 60% by 2050 by which time they will have decreased their carbon footprint due to energy generation by 80–95%. At the very least they look set to get very close to that goal.

        4) Batteries and power storage systems will improve significantly and solar/wind as well as transport will benefit in proportion.

        Agree.

        5) Coal will remain expensive as long as natural gas is plentiful from fracking but coal will remain a large % of the US and Chinese energy portfolios due to the abundant amounts available in those two countries.

        And what happens if the per KWh price of solar/wind drops below that of coal? Apparently solar is now cheaper than coal: https://hardware.slashdot.org/... [slashdot.org] and so is wind: https://hardware.slashdot.org/... [slashdot.org]

        6) Oil and gas based fuels will continue to play a dominant role in our energy portfolios for at least another 30-40 years. Exact percent unclear but big number without question.

        Things that could accelerate matters? Widespread adoption of carbon taxes. Removal of subsidies from fossil fuel industry. Appropriate levels of taxation on diesel/gasoline fuels commensura

    • by Mozai ( 3547 )
      Won't we still use "the fossil fuel industry" to fill the batteries before use? Batteries store power, they don't produce power.
    • Re:New tech... (Score:4, Insightful)

      by drinkypoo ( 153816 ) <martin.espinoza@gmail.com> on Friday February 03, 2017 @10:01AM (#53794705) Homepage Journal

      It's starting to look as if electric cars and clean energy may actually be manage to kill off the fossil fuel industry in the foreseeable future.

      You seem to be imagining that because we have the technological ability, that we have the social ability. As long as we are letting fossil fuel extractors dictate law, they will forestall the future. And if we do it long enough, humanity's future will not include cars at all, at least, not for thousands of years. And if we fail to make it to a space race enough times, we'll destroy our ability to do it at all and then this will end up just another failed pocket of life in a universe that surely creates thousands of them. Life begins, it evolves, it develops technology, it uses up its resources and it dies. And we can supposedly do better, but look at human history which follows precisely this pattern. Civilization, empire, war uses up natural resources, decline. Europe would have been a wasteland if not for the plague, because all the trees would have been cut down to build warships.

    • Uh, what do batteries have to do with it? If anything, this will raise the demand for coal in the short term.

      As for oil, you do realize that most of the stuff you buy is made of oil, right? Even if we quit burning it tomorrow (news flash: we won't) the oil industry won't skip a beat.

    • "It's starting to look as if electric cars and clean energy may actually be manage to kill off the fossil fuel industry in the foreseeable future."

      Foreseeable? Yes. Immediate, No.

      The fossil fuel industry isn't going away for quite a while, if ever. Aviation isn't likely going to go electric unless the cost of hydrocarbons becomes prohibitive. Batteries have, and likely will have, relatively poor energy density compared to the same weight of hydrocarbons. That'll be true for a long, long time. Maybe al

  • You can get 18650 as cheap as USD 1.5 in retail quantities

    A mid-sized OEM can buy them at 0.6~0.7

    Big ones at "material cost + 10%"

    If Tesla sized company buys them at $1 and they get them rated at 3.0 mAh. 1 kwH costs them $90

  • Nice...but... (Score:3, Insightful)

    by Anonymous Coward on Friday February 03, 2017 @07:13AM (#53794097)

    ....why are electric cars still ridiculously expensive? For most of the models on the market I can get two or even three gas powered cars. Sure, there probably is a difference in the cost of operation, but the biggest hurdle is the initial cost....which is why I drive a 15 year old car, although it only has 61000 miles on it. I rarely drive more than about 15 miles a day, I'd be the perfect candidate for an EV, but an EV costs as much as a house in this region.

    • If you drive only 15 miles / day, you won't benefit from the lower operating costs of an electric vehicle. Right now you have a situation where the up-front cost of the equipment is higher and the savings are realized in the operational costs. This will only make sense if there is a lot of operation. Some people commute 45 minutes / day in traffic. They waste half their gas idling an ICE as they sit still on a freeway. This pollution is spewed out in the most densely populated areas. Switching these c
    • ....why are electric cars still ridiculously expensive? For most of the models on the market I can get two or even three gas powered cars. Sure, there probably is a difference in the cost of operation, but the biggest hurdle is the initial cost....which is why I drive a 15 year old car, although it only has 61000 miles on it. I rarely drive more than about 15 miles a day, I'd be the perfect candidate for an EV, but an EV costs as much as a house in this region.

      Well, you can get a Nissan Leaf for about $37,000 before the $7500 tax credit the US government gives you for buying a fully electric vehicle. That brings the price down to about $30,000. That's not cheap, but you can't even get the really cheap subcompacts any more for less than $18,000 so you can't really get 2 or 3 cars for the price of the Leaf. Now if you're only comparing Tesla or Porsche or BMW prices, then yes, you are quite right. The Leaf could work well for you. I leased one for 3 years and

    • by pem ( 1013437 )
      Mitsubishi's i-Miev was cheap to begin with and is not very well marketed. I bought one in 2014, and it worked great.

      Last August, the dealership was getting rid of the 2016 models. I gave my 2 year old one to my daughter, and got a brand new one for less than $17500 TT&L. After the federal $7500 tax credit, that came to less than $10K.

      On the one hand, the federal tax credit is not refundable, which means that you have to owe at least that much to make use of it. On the other hand, the credit is

    • Because TFA is a rose-colored glasses interpretation of the data.

      Batteries costing $190/kWh by 2020 still means you're paying $190 to carry around 12 cents worth of electricity. Even if you completely charge and discharge the battery $190 / $0.12 = 1583x (equivalent to 375,000 miles on the Tesla S 90 @ 38 kWh/100 mi), you've still doubled the cost of the electricity you're using.

      Over a 100,000 mile lifetime, you've cycled the battery pack only 100,000 mi * (38 kWh / 100mi) / (90 kWh) = 422x. So at a
  • Besides, fuel cells are the future. Batteries are a slow to recharge, fragile, volatile, resource-hungry, ridiculously expensive stop-gap, no matter how much you mix units and confuse the summary.
    • Besides, fuel cells are the future

      On what planet? Certainly not this one. Baring some miracle technological breakthrough not in my lifetime either.

      Batteries are a slow to recharge, fragile, volatile, resource-hungry, ridiculously expensive stop-gap, no matter how much you mix units and confuse the summary.

      And fuel cells utterly lack a fueling infrastructure, have no standardized fuel type, are not currently commercially viable on a large scale. The only people who think fuel cells are "the future" are geeks who aren't looking at the big picture. Fuel cells are useful but they have some show stopper problems relating to fuel that prevent them from becoming a replacement for either gas/diesel en

      • by jabuzz ( 182671 )

        I posted on this just the other day, but charge time is to a large extent a function of capacity.

        That is if my car can go 600 miles on a full charge it does not matter if it takes 12 hours to charge because outside tag team driving I can't actually go that far without requiring breaks or becoming unsafe due to tiredness.

        Sure it requires an extensive roll out of charging stations, especially at home, but that will happen, and think of all the jobs it would create :)

        • by fyngyrz ( 762201 )

          I can't actually go that far without requiring breaks or becoming unsafe due to tiredness.

          It won't be too much longer before you won't have to be doing the driving, so it won't matter if you're tired or not.

  • by thoper ( 838719 ) on Friday February 03, 2017 @08:02AM (#53794219)
    i give this post a solid 5/7..... per kwh.... per kwh in 2010
  • by petes_PoV ( 912422 ) on Friday February 03, 2017 @09:22AM (#53794499)
    ... because next year they will cost less and perform better.
    And the year after, better still
    etc.

    It is only at the point when a buyer will spend less on buying and running an EV over its lifetime, than the person would spend on buying and running a car that uses petrol or diesel that it makes economic sense.

    The next question would be that if your intention is to "save the planet", would the cost difference be better spent on an EV or by being donated to one of the causes advocating less climate change?

    (Of course, there is a third reason: to be able to brag look at me, I've got an electric car! Aren't I trendy / environmentally responsible / rich)

    • The takeaway message: don't buy an EV because next year they will cost less and perform better.
      And the year after, better still

      The takeaway message for you is don't start subjects in comment lines. It's fucking annoying.

      But also: this is how literally everything is. Using your logic, I would never buy anything.

      • You're forgetting the value of utility. A car that I buy now can take me to a place where I can make more money than at home.
    • Ever hear of leasing?
  • Despite news of falling prices, the cost of the prismatic LiFePO4 cells commonly used in roll-your-own EV conversions has not come down AT ALL. They're still $1.30-1.40/Ah, or about $410-440/kWh, the same as they were in 2010. So a pack for a usable vehicle is still at least $10K. Sad to say, it's now much cheaper to buy a used EV than to build one.
  • Better Summary Info (Score:5, Informative)

    by zmaragdus ( 1686342 ) on Friday February 03, 2017 @11:45AM (#53795435)
    Because the original summary was such crap, I bothered to read the report and have this information:

    From 2010 to 2016, battery pack prices fell roughly 80% from ~$1,000/kWh to ~$227/kWh

    From 2013 to 2017, ranges of EVs have increased. The Nissan Leaf went from 75mi to 107mi, and the Tesla Model S went from 208mi to 249mi. This is mostly due to bigger battery packs (24kWh --> 30kWh and 60kWh --> 75kWh respectively).

    In 2016, the battery pack cost is still ~$227/kWh, meaning that a 60kWh Tesla battery pack is ~$13600. The target cost for parity with ICE vehicles is $100/kWh, which is likely to happen sometime between 2025 and 2030.

  • by u19925 ( 613350 ) on Friday February 03, 2017 @03:19PM (#53797399)

    Self driving cars will increase adoption of electric cars. Currently, the range is limited due to high cost of battery and very few fast charging stations are there. Imagine your office is 30 miles commute and charging station is 0.5 mile away from your office. You can't use cheap electric cars with 75-80 miles range. But if these are self driving, then you just get down at your office and the car will go to charging station and park itself.

    It is also possible that self driving cars will make taxis cheaper than owning cars and most people will get rid of cars and use taxis (or at least have only 1 owned car per family). The self driving cars or taxis will charge batteries overnight, drive people during peak hours, charge around noon and drive back in evening.

    So the future is electric cars even at current battery prices.

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