Cost of EV Batteries Continues to Fall

Cost of EV batteries continues to fall
Cost of EV batteries continues to fall

The US Department of Energy has been very prominent in the media of late with regards to electric vehicles and their potential for the future. The Department has issued a raft of graphs and comparisons between the hybrid market and EV technology. However, over the last few days we have seen an interesting statistic from the US Department of Energy stating that it believes the cost of electric vehicle batteries will fall to around $10,000 by 2015.

While this may seem relatively expensive, it is worth bearing in mind that the cost of EV batteries has already fallen by nearly 50% over the last four years. In line with modern day technology, where the relative power and the cost move in very different directions, it seems that the EV battery sector is really starting to motor.

Do EV batteries play a major role in the EV market?

Aside from the obvious fact that EV batteries power electric vehicles, in many cases they make up more than 50% of the overall cost of the vehicle. When you bear in mind that the cost of EV batteries is expected to fall to around $10,000 by 2015, it looks as though we could see a significant reduction in the cost of electric vehicles themselves in the short to medium term.

It is also worth noting that electric vehicle sales doubled in the U.S. for the month of June compared to the same period last year. The Department confirmed sales of nearly 9000 vehicles in June alone and many people expect this rate of growth to increase in the short to medium term. More and more major automobile manufacturers are now staking a claim in the EV market and while there are some suggestions of short-term losses they do not appear overly concerned about any potential reduction in profitability for now.

Why has focus moved to the EV battery market?

If you look back on the development of the electric vehicle market over the last decade you will see enormous focus upon electric vehicles themselves as well as significant investment. In many ways the electric vehicle battery market was left behind and it is only over the last couple of years that we have seen significant investment from governments and private companies. It will be interesting to see how quickly the EV battery market does progress because there are some very interesting rumours swirling about the sector.

Quote from ElectricForum.com : "Israeli company Phinergy is today taking centre stage within the electric vehicle market amid rumours of a breakthrough in the battery sector. Traditional lithium ion batteries seem to have been pushed to the limit by battery manufacturers to date although developments in the aluminium–air battery arena could give electric vehicles a journey span of 1000 miles. So what next?"

We are now starting to take for granted battery packs which will take electric vehicles beyond the 100 mile journey capacity on a full charge. In many cases, journey capacity approaching 200 miles per full charge is not turning too many heads and these are starting to become more commonplace. It is only once we reach the 300 mile capacity, cited in a number of U.S. surveys amongst motorists, that the real challenge to traditional gasoline vehicles will hit full speed. As we have mentioned before, there is intense speculation that the likes of IBM are on the verge of releasing a 500 mile capacity EV battery pack with even more amazing rumours about a potential 1000 mile journey capacity battery pack.

Conclusion

In many ways we have a win win situation for the electric vehicle industry with the fact that electric vehicle battery technology is improving and the cost is coming down all the time. Not only do we have manufacturing efficiencies and volume savings but the cost of the elements used to create these high-tech batteries also continues to fall. The future is certainly very interesting for EV battery technology companies!