A Behind the Scenes Take on Lithium-ion B

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A Behind the Scenes Take on Lithium-ion Battery Prices

Automakers and policy makers are increasingly voicing their belief that the passenger vehicle of the future will be powered (partially or fully) by electricity. There remains, however, a lack of consensus on the timing and speed of the transition, in large part due to differing opinions on current and future lithium-ion battery costs and performance. The rise of the electric vehicle is also forcing automakers to reconsider their role in the automotive supply chain, for example by bringing more battery expertise in-house. This is counter to one of the big trends over the last 30 years whereby automakers divested their supply chain arms. Removing misconceptions around lithium-ion batteries is becoming more important than ever.solar street light lithium battery

In December 2018, BloombergNEF published the results of its ninth Battery Price Survey, a series that begin in 2012 looking back at data from as early as 2010. The annual price survey has become an important benchmark in the industry and the fall in prices has been nothing short of remarkable: the volume weighted average battery pack fell 85% from 2010-18, reaching an average of $176/kWh.
Interest from our clients – and on social media – rises every year we publish the survey, and 2018 was no exception. Among the many questions and comments we have received, a few broad themes stand out and are worth addressing. Often, the devil is in the detail and requires deeper analysis than can be squeezed into 280 characters. Here are some of the areas we got questions on, and our thoughts on each:

“Current prices are far lower than this in reality.” This is partially true. There are numerous examples of pack prices quoted to us that are lower than the average. There is a wide range of battery types in the market and anecdotes do not make a market. Many of these, such as Tesla’s publicly stated prices, actually feed into our average. These are then weighted based on the volumes sold. The inclusion of Tesla’s pricing has an important impact due to the large volumes the company has shipped. Other companies may have lower prices but less impact on the average due to lower volumes. In other cases, people are incorrectly comparing cell and pack costs.