Well at last there is some proof to back up that conventional wisdom from the car industry. A new Electric Vehicle Battery Price Index report from Bloomberg New Energy Finance shows that the average price for electric car batteries-a key factor in the price of electric models-have dropped down by 14 per cent in the first quarter of 2012 to $689/kWh, compared to an average cost of $800/kWh in the same period a year earlier.
Studying the price of lithium ion batteries for EVs, Bloomberg also discovered that prices are now down around 30 per cent from $1000-plus levels in 2009.
The bad news however, is that the drop is largely attributed to an excess in manufacturing capacity and weak demand, rather than due to an increasing market for the batteries, driven by electric car sales. Current production capacity for electric vehicle battery packs outstrips demand by over 10GWh, equivalent to around 400,000 pure battery electric vehicles, and the gap is on course to widen to 17GWh by the end of 2013. By comparison, the total number of electric vehicles sold worldwide in 2011 was 43,237.
Quarter of the price of an EV
Electric models such as the Nissan LEAF, Mitsubishi iMiEV and Tesla Roadster typically require between 16 and 85kWh of battery capacity, at a total cost of between $11,200 and $34,000- representing around 25 per cent of the total cost of the vehicle.
Battery pack prices for plug-in hybrid vehicles such as GM’s Volt are on average 67 per cent higher in terms of $/kWh, than those for electric-only vehicles like Nissan’s LEAF. This higher price is mainly due to the greater power-to-energy performance required for plug-in hybrid vehicles.
Bloomberg New Energy Finance expects the cost of lithium-ion batteries to drop as far as $150/kWh in 2030 (in 2012 dollars).
Michael Liebreich, chief executive of Bloomberg New Energy Finance, commented: "Batteries are one of the biggest drivers of the cost of electric vehicles, and hence of their uptake. A sharp decline in price may be unwelcome for battery manufacturers, but it is essential for the long-term health of the sector. Battery prices will be one of the key pieces of data for investors, policy-makers and the car industry to watch over the next few years, and that is why we have launched this index."
