A new report from the Rocky Mountain Institute (via Forbes) finds that improvements in the cost and performance of batteries are quickly outpacing forecasts, due to massive investments in battery manufacturing and steady advances in technology.
According to RMI’s Breakthrough Batteries Report, venture capital firms invested over $1.4 billion in battery tech in the first half of 2019 alone. Total manufacturing investment – both previous and planned through 2023, amounts to around $150 billion. By 2023, the capital cost for new battery manufacturing capacity is expected to decline by more than half compared to 2018. Battery costs could drop to $87/kWh by 2025 (in March, Bloomberg estimated the current average cost at $187/kwh).
RMI expects lithium-ion to remain the most important battery technology until 2023, after which newer formulations will come into use for specific applications: solid-state batteries (including zinc alkaline, Li-metal, and Li-sulfur) for heavier vehicles; low-cost, long-life batteries (including zinc-based and flow batteries) for grid balancing; and high-power batteries for fast charging of EVs.
The rapidly increasing penetration of stationary storage will begin to make natural gas plants uneconomical, and much fossil fuel-related infrastructure will become stranded. According to RMI, declining battery costs are already causing cancellations of planned natural gas generation.
RMI predicts that many aspects of the transition will be happening outside the US – EV adoption will proceed more quickly in countries such as India, Indonesia and the Philippines, where smaller vehicles (which need smaller batteries) are popular. Americans’ love of big cars will hold us back in the Oil Age for some time, as discussed in another recent piece in Forbes.