LONDON:
The cost of battery cells used for electric vehicles has fallen to an average of $110 per kilowatt hour (kWh), making such cars competitive with those using internal combustion engines (ICE), according to Benchmark Mineral Intelligence (BMI).
One barrier to a higher take up of electric vehicles has been the high cost of producing the lithium-ion rechargeable batteries, which according to BMI averaged $120 per kWh last year and $280 per kWh in 2014.
“The holy grail to make electric vehicles cheaper than ICE vehicles is deemed to be battery cells costing $100 kWh,” said BMI Managing Director Simon Moores.
“The reality is at $110 a kWh for large automotive contracts we have already reached the tipping point.”
BMI estimates that between 2014 and 2017 the price of battery cells fell 16.5% per annum, but between 2017 and 2020 the drop was only 5.8% per annum.
“We may have seen the last of the big easy wins for lithium-ion battery producers in reducing cost.It is now about reducing and stabilising the cost of your biggest input raw materials such as lithium, nickel, graphite, cobalt and manganese,”,” Moores said.