{"id":5739,"date":"2021-09-20T06:58:21","date_gmt":"2021-09-20T06:58:21","guid":{"rendered":"https:\/\/euromenaenergy.com\/?p=5739"},"modified":"2021-09-20T06:58:21","modified_gmt":"2021-09-20T06:58:21","slug":"why-an-electric-car-battery-is-so-expensive-for-now","status":"publish","type":"post","link":"https:\/\/emimer.com\/?p=5739","title":{"rendered":"Why an Electric Car Battery Is So Expensive, For Now"},"content":{"rendered":"

At\u00a0Tesla Inc.<\/a>\u2019s ballyhooed Battery Day event last year, CEO Elon Musk set himself an ambitious target: to produce a $25,000 electric vehicle by 2023. Hitting that sticker price — about $15,000 cheaper than the company\u2019s\u00a0least expensive model<\/a>\u00a0today — is seen as critical to deliver a true, mass-market product. Getting there means finding new savings on technology — most critically the batteries that can make up a third of an EV\u2019s cost — without compromising safety. Alongside Musk, traditional automaking giants including\u00a0Toyota Motor Co.<\/a>\u00a0and\u00a0Volkswagen AG<\/a>\u00a0are pouring tens of billions of dollars into the race.<\/p>\n

1. Why are EV batteries so expensive?<\/h3>\n

Largely because of what goes in them. An EV uses the same rechargeable lithium-ion batteries that are in your laptop or mobile phone, they\u2019re just much bigger — cells grouped in packs resembling big suitcases — to enable them to deliver far more energy. The priciest component in each battery cell is the cathode, one of the two electrodes that store and release electricity. The materials needed in cathodes to pack in more energy are often expensive: metals like cobalt, nickel, lithium and manganese. They need to be mined, processed and converted into high-purity chemical compounds.<\/p>\n

2. How much are we talking?<\/h3>\n

At current rates and pack sizes, the average battery cost for a typical EV works out to about $6,300. Battery pack prices have come down a lot — 89% over the past decade, according to\u00a0BloombergNEF<\/a>. But the industry average price of $137 per kilowatt hour (from about $1,191 in 2010) is still above the $100 threshold at which the cost should match a car with an internal-combustion engine. Costs aren\u2019t expected to keep falling as quickly, and rising raw materials prices haven\u2019t helped. Still, lithium-ion packs are on track to drop to $92 per kWh by 2024, according to BNEF forecasts, and $58 per kwh by 2030.<\/p>\n

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Greedy for Gigawatts<\/h3>\n

EVs are going to be the driving force for lithium-ion battery demand<\/p>\n