When will lithium-ion battery prices reach the price point of $100 per kWh that so many in the media are calling the “magic number?” According to Winfried Hoffmann, an analyst at the consulting firm ASE, the glad day will dawn sometime around 2030.
Hoffmann, the former CTO of Applied Materials, is a well-known figure in the photovoltaic world. In the early days of the solar energy boom, he made some predictions about the future cost curve of solar modules that have proven to be quite accurate. Hoffman applied similar logic to his predictions about battery costs, which he outlined in detail at a presentation during the recent EU PVSEC meeting in Amsterdam.
In an interview with pv magazine, which covers the solar energy field, Hoffman said he expects lithium-ion batteries to “break the sound barrier” of $100 per kWh around the same time that the world’s total storage capacity reaches one terawatt-hour. That figure currently stands at approximately 7 GWh, so assuming an average annual growth rate of 31%, cumulative capacity of one tWh will be achieved by 2030.
This has implications beyond the EV sphere – battery storage will be an important enabling technology for large-scale renewable energy. If solar power generation costs also fall at the rate Hoffmann expects, by 2030 decentralized solar energy will be cheaper than electricity from new nuclear power plants or coal power plants with carbon capture technology.
Hoffman characterized his prediction as an optimistic one, saying, “Experts in their own field are often unable to imagine how fast prices can fall.” However, a recent report that focused on Tesla’s battery technology appeared to reach a similar conclusion, saying, “Our assessment shows that pack pricing for the 2025 time scale could be as low as $167/kWh.” Even that is conservative compared to the vision of Elon Musk, who has said that he would be “disappointed if it took us 10 years to get to a $100/kWh pack.”