Studies in the automotive industry have shown that majority of consumers would consider buying an electric vehicle (EV) – a vehicle powered by battery-operated electric motor – instead of conventional cars with gasoline powered engine.
But it’s widely assumed that electric cars will never emerge into the mass market if their initial cost is significantly high compared to conventional models. This is mainly contributed by the battery pack, which is the most expensive component of the electric vehicle.
But according to the Carbon Brief report, consumers can expect reduction in electric car prices due to drop in cost of lithium-ion cells. Research estimates now show that cell cost have reduced to as low as $140 per kilowatt-hour. The earlier estimates in 2013, by International Energy Agency (IEA), had shown the cell cost to be around $300 per kWh by 2020. But leading electric vehicle manufactures like Tesla and Nissan, are said to have already smashed the IEA’s $300-per-kWh barrier, a sign the cell cost is fast reducing.
The research estimates are based on data sourced from electric vehicle and battery manufacturers, analysts, peer-reviewed academic publications, as well as the media. But the researchers also note that this data is incomplete since manufacturers rarely disclose their true costs of manufacturing their products to the public.
Additionally, the analysts note that for electric vehicles to gain mass appeal, the battery costs will have to fall further. They cite a figure of $100 per kWh as the threshold at which electric cars will be able to readily challenge conventional gasoline driven cars.
Economies of scale will also be a factor that may see a reduction in cost, where manufacturers will have to produce cars at a profit and sell enough of them.
Nissan has seen its model, Nissan Leaf, become the highest selling electric vehicle, and with sales estimated to cross a 200,000 mark by the end of 2015. The company is expected to offer some models with ranges of 120 to 150 mile which could see the EV model become profitable as well as appealing to the consumer.
Tesla Motors is currently constructing its Nevada “Gigafactory” which will open in 2017, with an intention to produce cells on large scale to realize a $35,000 base price for its Model 3 sedan.
The cell prices may not reduce as fast as everyone would want, but with enormous research being carried out into alternatives to the current lithium-ion chemistry, and the carmaker’s investment in increased car production, we should see a drop in initial price of electric vehicles in the near future.