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

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.

Comments

omg proof reading

[Anonymous Coward]

"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?

[edx93]

> 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...

$190 / kWh and $20 / kWh less than $100 / kWh

[hattig]

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'."

Re:$190 / kWh and $20 / kWh less than $100 / kWh

[esperto]

This summary is unreadable, it literally makes no sense.

New tech...

[Freischutz]

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.

Re:New tech...

[drinkypoo]

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.

Nice...but...

[Anonymous Coward]

....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.

Re:Why Trump is relevant to the story

[drinkypoo]

If he's not like every other politician and actually does what he promises, then he's a far better president than any that have come before.

Be careful what you ask for. Hitler promised to do something about those darned Jews...