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Battery makers expect to cut prices in half by 2020

Executives at two leading battery makers said this week that the cost of lithium-ion batteries is steadily declining, and could well drop to half of today’s price by 2020.

“We have an internal target to go down by at least a factor of two by 2020,” said LG Chem Power CEO Prabhakar Patil, at this week’s Battery Show. “I am very positive in terms of the slope that I see.”

Brian Kesseler, President of Johnson Controls’ Power Solutions division, agreed, but said that a lack of standardization for power control systems could keep prices of battery packs high. “The real issue is the cost of the total system,” he said. With each automaker using a customized system, the overall cost of an EV is unlikely to decline dramatically.

Battery cost has always been the bête noire of EVs. The issue was brought into focus this week as GM announced a major expansion of its battery lab, and VP Doug Parks made some tantalizing remarks (not for the first time) about an upcoming EV with a 200-mile range and a moderate price tag. “The real trick will be who can do a 200-mile car [in the $30,000 price range]. We’re all in races to do that.” Tesla is also in that race, but for either company to get across the finish line, battery costs will need to come down significantly.

Battery makers don’t disclose the cost of their batteries, but the Argonne National Laboratory estimates that average cost is currently around $500 per kWh. So a 24 kWh battery pack, like the one in the Nissan LEAF, probably costs around $12,000.

 

Source: Wall Street Journal, AP

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