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Tuesday, March 9, 2010

Deutsche Bank: Battery costs appear to be coming down faster than expected

Another week, another 'analyst' report trying to predict the future of electric vehicles. Over the last 12-24 months we've read numerous 'reports' claiming the cost of EV batteries is and will remain a firm $1,000 Kwh.

Those holding that 'opinion' and publishing their views have included the highly esteemed Vinod Khosla, Boston consulting and engineering undergrads at Carnegie Mellon who have all predicted doom for EVs based on this figure. Their logic goes, if the Chevy volt carries a 16 Kwh pack then the price of the battery alone will be $16,000. All those willing to put their necks out and publish such dire predictions manage to totally ignore the fact that at todays wholesale prices, small format Li-ion batteries sell for closer to $350 Kwh

The good news is a new report issued by Deutsche Bank indicates that, before mass production of battery powered electric vehicles has even commenced, large format Lithium Ion battery costs appear to be coming down faster than expected. They write “we continue to believe that the market underestimates the potential for growth in this segment” and “we’ve noted evidence of steeper than-expected battery price declines which will likely bolster the consumer value proposition and potentially lead to stronger demand than we originally envisioned.”

The firm notes the average lithium-ion cell price in 2009 has been $650 per kwh, but claims automakers are already seeing bids for $450 per kwh from battery companies for delivery contracts in the 2011/2012 time frame.

Furthermore, they predict an additional 25% decline in price over the next 5 years and a 50% decline over the next 10 years along with a doubling of performance over the next 7 years.

Previously LG Chem subsidiary Compact Power’s CEO Prabahkar Patil said he expected cell cost to drop up to four-fold in the next 10 years, and that lithium ion cells for non automotive applications are already $350 Kwh.

Deutsche Bank Electric Car Analysis - Batteries

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1 comment:

Christian Marcus said...

Thanks for a great blog I follow it closely. I am working as PR & Marketing Manager for a Danish company leasing out electric cars mainly to private companies and municipalities. We have converted a Citroen C1 because no production cars are available as of yet. (except Tesla of course) Again thanks for the good work.

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