Will the big drop in the price of lithium batteries cheapen electric vehicles?

In the last three decades, the price of lithium batteries has been lower by 98 percent and there is a belief that it will be even lower.

IC: EC

Falling prices of lithium batteries should make electric vehicles significantly cheaper and the environment healthier.

During this period, the development of batteries was very long. At the beginning of the 1990s, the battery capacity for a single house had a daily cost of $75,000. The battery cells weighed 113 kilograms and as large as a beer box.

Currently, the same amount of energy can be delivered for less than $2,000 from a 40kg battery and the size of a backpack.

Such technological advancement is crucial to decarbonizing the global economy. The problem with renewable energy sources is in the sources of energy itself – the Sun does not always shine and does not always blow the wind. Therefore, there are batteries that will recharge energy, which will be used when it is missing.

Batteries could be particularly useful when using certain devices that use a lot of energy produced by fossil fuels. These include air conditioning, which would significantly reduce emissions of harmful gases.

Character for electric vehicles

They are also quite important for the development, that is, the production of electric cars. Since Tesla built the Roadster model in 2008 with lithium-Ionian batteries, the number of electric cars has grown to more than seven million.

Given that the price of a battery accounts for a third of the total cost of an electric car, reducing the cost of producing them is crucial for them to become competitive with conventional cars.

Why is the price of batteries decreasing?

The price of batteries is getting lower and the question arises as to why this is so. Micah Ziegler and Jessika Trancik of the Massachusetts Institute of Technology gave the answer to this question.

They believe the price of the battery is decreasing as the number of companies that produce them increases. Thus, manufacturers divide the cost of building factories and industrite resource suppliers to lower prices.

The amenable American researchers pointed out that technological knowledge in terms of the number of patents reported also contributed to this. They concluded that this fact it was the only thing that resulted in a 40 percent drop in price.

Goal for the future

It is certain that battery production will continue to evolve. Currently, the average cost for one kilowatt-hour of energy from a lithium-Ionian battery is $140.

The goal is to be $100 and by then electric cars could become competitive with conventional ones, bloombergNEF said in a consultancy. Battery manufacturers could achieve this goal in the next few years.

Demand for batteries will rise and their price will be lower, the Economist newspaper concluded.