http://arstechnica.com/science/2015/07/electric-vehicle-batteries-are-getting-cheaper-much-faster-than-we-expected/
Electric vehicle batteries are getting cheaper much faster than we
expected
by Megan Geuss - Jul 16, 2015
And automakers are using those economies of scale to jump into
stationary
storage.
Earlier this year, Telsa Motors made headlines when it announced that
the
company would start selling Tesla-branded stationary storage batteries.
The
move was expected, but a bit odd—battery storage for homes has been
around
for years, but it has never really been cost-effective enough in most
households to merit the kind of treatment that Tesla gave it. While
Tesla
successfully nurtured a luxury electric vehicle market, it still seemed
out
of place to see a luxury brand going out of its way to put car
batteries on
homes.
Ars argued that the real news behind Tesla's stationary storage
announcement
was not that of the consumer-focused Powerwall, but that of the power
pack,
Tesla's stationary battery system for industrial use cases.
The truly surprising part of Tesla's Powerwall announcement, however,
was
its price point. In 2014, the average cost of installing a stationary
Li-ion
battery in a California home was $23,429, according to The Wall Street
Journal. In May, Tesla CEO Elon Musk said that these batteries would
start
at $3,500, plus a $500 installation cost.
It's no secret that Li-ion battery packs have been getting cheaper, and
it's
unsurprising that Tesla, would experience some economies of scale to
allow
that kind of price point (whether or not the price is subsidized by the
company). And the price is only likely to come down, as the company is
in
the process of building a massive “gigafactory” outside of Reno,
Nevada,
with Panasonic to produce Li-ion batteries. Beyond Tesla, however, a
recent
paper published in Nature Climate Change gathered data to confirm that
the
cost of Li-ion battery packs for electric vehicles are falling for
everyone.
If trends continue, the paper suggests, electric vehicle battery packs
and
their stationary brethren could compete more effectively against gas
cars
and backup generators not too far into the future.
The research suggests that the cost of producing battery packs for
electric
vehicles has fallen dramatically between 2007 and 2014, to lower price
points than previous optimistic projections had expected. “Results show
that
costs in 2014 were probably already below average projected costs for
the
2020 time frame,” Björn Nykvist and Måns Nilsson wrote in their recent
paper.
Nykvist and Nilsson say their data indicate that battery pack costs
will
continue their precipitous decline, perhaps even reaching the point
where
Li-ion battery systems on electric vehicles reach parity with
gas-guzzling
vehicles. (Although the authors of the paper admit that this point, if
we
ever reach it, is still far in the future—not something we're likely to
see
this year or next.)
“The single most important factor in achieving a compelling and
affordable
mass-market BEV (battery electric vehicle) is its relative cost,”
Nykvist
and Nilsson wrote. “It is commonly understood that the cost of battery
packs
needs to fall to below US$150 per kWh in order for BEVs to become
cost-competitive on par with internal combustion vehicles.”
Nykvist is a research fellow at the Stockholm Environment Institute
(SEI),
and Nilsson is the Research Director at SEI. The two aggregated cost
estimates for electric vehicle battery packs that were found in
scientific
journals as well as estimates found in “the most cited grey literature,
including estimates by agencies, consultancy and industry analysts;
news
items of individual accounts from industry representatives and experts;
and,
finally, some further novel estimates for leading BEV manufacturers.”
The
two researchers did not distinguish between different variants of
Li-ion
battery chemistry because there was too little data to break out each
technology separately, nor did they take into account the costs of
hybrid
car batteries.
What they found was that the cost of battery backs for electric
vehicles has
decreased from about $1,000 per kWh in 2007 to about $450 per kWh in
2014.
And that's taking all battery electric vehicle manufacturers into
account.
When you separate out the largest companies making electric vehicles,
the
cost reductions get even more dramatic. “(T)he cost of battery packs
used by
market-leading BEV manufacturers are even lower, at US$300 per kWh,”
the
researchers added.
The authors admitted that their data was imperfect due to secrecy
surrounding business deals. But public statements made by electric
vehicle
makers were used to confirm some of the numbers that the researchers
found.
“Current average cost at US$300 per kWh for market-leading actors in
2014
is, however, very close to key information given by Tesla Motor chief
engineer JB Strubel,” the paper asserts, “who has indicated in 2013
that the
costs of the Tesla Model S battery pack is below 25 percent of the
total
costs of the car in most cases, corresponding to approximately US$310
per
kWh. Similarly, other industry experts have also estimated that battery
packs in general make up 25 percent of vehicle prices, which
corresponds to
approximately US$300 per kWh, for example, Nissan Leaf in 2014.”
To explain the shift, the researchers measured what they called the
“learning rate,” which they defined as “the cost reduction following a
cumulative doubling of production.” For BEV manufacturers around the
world,
the learning rate was found to be between 6 and 9 percent. And that
rate
could climb: “There are still R&D improvements to be made in, for
example,
anode and cathode materials, separator stability and thickness, and
electrolyte composition,” Nykvist and Nilsson wrote. “Among these
factors,
input material cost is among the most important, and costs as low as
US$300
per kWh due to such improvements have been discussed. Together with
improvements due to economies of scale, a 12-14 percent learning rate
is
conceivable.”
Venkat Viswanathan, an assistant professor for mechanical engineering
at
Carnegie Mellon University (with whom Ars has talked about Tesla's
batteries
before), said he was “cautiously optimistic” about the paper's
findings, and
noted that an analysis from Bloomberg New Energy Finance offered
similarly
optimistic results. In April at Bloomberg's New Energy Finance summit,
a
presentation on renewable energy showed that the learning curve for
Li-ion
batteries has closely followed the learning curve for solar
photovoltaics [
http://about.bnef.com/content/uploads/sites/4/2015/04/BNEF_2014-04-08-ML-Summit-Keynote_Final.pdf
] from 1974 to 2014 (slide 13).
All this means that, barring any circumstances we can't yet foresee,
the
future is looking good for those trying to keep electric vehicle costs
down
(although getting people to buy electric vehicles is a separate
problem,
recently addressed by the National Academy of Sciences). And that might
mean
good things for stationary storage units like the ones Tesla announced
in
May. In an e-mail to Ars, Nykvist wrote that costs for stationary
storage
Li-ion batteries “appear to translate” from the electric vehicle
battery
pack analysis.
“It is too early to say for certain, but it is clear that the
innovation
systems around Li-ion batteries for all types of applications (consumer
electronics, cars, stationary storage) are connected and benefit from
the
same basic R&D and learning over time,” he continued. “For Tesla
specifically, it is definitely the case.”
Perhaps as a signal to those outside boardroom discussions, more and
more
automakers are not only developing electric-only vehicles; in recent
months,
many have jumped into the stationary storage game. Daimler announced
its new
home storage battery in late May for customers in Germany (one of the
few
areas in the world where stationary storage makes sense for individual
home
owners right now, due to the country's vast solar infrastructure). In
June,
GM suggested that it might consider refurbishing old electric vehicle
batteries to sell for stationary storage use. Around the same time
Nissan
made the same claims.
Although none of these companies announced pricing or specs for their
stationary storage plans, Tesla, not to be outdone, announced in June
that
it would double the output of the 7kWh Powerwall from discharging 2.2
kilowatts during continuous use to discharging 5 kilowatts. "We took
some of
the negative feedback to heart," Elon Musk said at a shareholders'
meeting,
referencing one of the main criticisms of the $3,500 unit—that despite
its
capacity, it might not be able to discharge enough energy at one time
to
feed a household.
So, this race to bring Li-ion batteries to a market that may be on the
cusp
of affording them is likely to continue. But when will Li-ion batteries
reach a price point where they make more economic sense to use in cars
and
in stationary storage than gasoline or gas generators? Nykvist told
Ars: “It
is impossible to assess when such a low level of USD 150/kWh will be
reached
as it is too far into the future, but we conclude in the paper that the
trajectory is very positive, and if the current momentum lasts for a
couple
of years... a cost level somewhere around 200-250 USD/kWh before 2020
is
quite likely.”
[© arstechnica.com]
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