Analysts have estimated that battery pack prices should drop to US$100/kWh so that electric vehicles have a chance to compete with cost with the internal combustion engine. Automakers and industry experts believe that the US$100/kWh milestone could be reached as early as in 2024, or even sooner—and that milestone will unleash the electric vehicle revolution.

Lithium-ion battery pack prices have declined by 87 percent from 2010 to 2019, with the volume-weighted average hitting US$156/kWh last year, according to estimates from BloombergNEF.

“By 2024, battery pack prices go below $100/kWh on a volume-weighted average basis, driven in part by the introduction of new cell chemistries and manufacturing equipment and techniques,” BNEF said in its Electric Vehicle Outlook 2020.

By 2030, battery pack prices are expected to reach US$61/kWh, BNEF has estimated, although high levels of investment will be needed to keep prices falling.

The US$100/kWh milestone has been considered as the “magic number” in the industry, Venkat Viswanathan, a battery expert at Carnegie Mellon University tells Bloomberg’s Akshat Rathi.

Many automakers are working to achieve the US$100/kWh milestone.

In March this year, GM said that its joint venture with LG Chem would drive battery cell costs below $100/kWh.

“The cells use a proprietary low cobalt chemistry and ongoing technological and manufacturing breakthroughs will drive costs even lower,” GM said.

Executives at Volkswagen told the New York Times last year that the company was paying less than $100 per kWh for batteries.

The tipping point for the EV revolution is just a few years away, Boston Consulting Group said at the start of this year.  

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Wood Mackenzie sees battery pack prices dropping below the US$100 kWh milestone by 2024, thanks to economies of scale and technological improvements, and despite the coronavirus-driven crisis.

“Global recession has left a dent in the electric vehicle (EV) sector but it’s a scratch on the paintwork, not a big repair job,” said Ram Chandrasekaran, Principal Analyst, Transportation & Mobility at WoodMac.

By Tsvetana Paraskova for Oilprice.com

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