Li-Ion Battery Prices To Drop 33-Plus Percent By 2017

According to a recent report from Pike Research, as manufacturing efficiencies improve and access to lithium expands, the installed cost of li-ion batteries will fall by more than one-third by the end of 2017.

As per the report, titled “Electric Vehicle Batteries,” the convergence of the automotive industry toward battery power and the engineering of safe, reliable, and economical li-ion batteries will slowly reshape the automotive industry as it moves toward electrification.

In terms of revenue potential, Pike Research forecasts the market for Li-ion batteries for transportation will grow from $2.0 billion annually in 2011 to more than $14.6 billion by 2017.

Li-ion batteries are facing many challenges such as achieving higher energy density, better safety, and greater discharge/charge rates. These linger despite advances in battery technology. According to Pike Research, although a number of li-ion chemistries are available today, none of them can yet claim to be the ideal solution.

The study further says 21 percent of the demand for electric vehicles will come from the U.S. while half the demand will come from Asia. Pike said it sees electric vehicles representing roughly 1.4 percent of the global automotive industry five years from now.

It really is a case of which will come first. Batteries need to be cheaper for consumers to widely embrace EVs, while manufacturers need more consumers buying EVs to be able to provide cheaper batteries.

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  • Van

    I do not like this forecast, but I fear it reflects reality. That is until the last line. There is no mystery to the cost influence of the “economy of scale” where the unit price falls and the total unit production increases.

    Instead production cost will significantly drop when the specific energy goes up either due to chemistry or to fabrication innovation.

    For example the NMC battery chemistry holds the promise of about twice the energy for about the same cost. For example a range of 186 miles vice 100 miles at about the same battery production cost.

    Fabrication innovation refers, for example in the Toyota project to closely fit several layers together, upping the volumetric specific energy by a factor of 4.

    But neither of these next generation batteries will be ready this year and perhaps not for 3 more years.

  • greg45

    I think this is definitely the biggest issue with battery these days is the price. I am glad to see that they price will be coming down. So many more people will be able to afford this.