Audi: Claims EV Battery Costs Of Around €100/kWh ($112/kWh)


Audi e-tron quattro

Dr. Peter Mertens, who is fresh face on Audi AG’s Board of Management serving as R&D Technical Development boss (since May 2017), wasted no time in disclosing some interesting information on battery costs while being interviewed with the German magazine auto motor und sport.

The Audi exec was asked if it was a good idea to start out out by first introducing a powerful, heavy all-electric SUV, to which Mertens responded (from German):

“We opted for a top-down strategy, because most buyers will be found there today in this segment.  Currently, a kilowatt hour costs about 100 euros ($112 USD) depending on the model.”

Audi e-tron quattro concept cutawat

While we have heard several automakers note that the “going forward” battery pricing their plug-in vehicle is rapidly coming down, this is probably the lowest claim directly referencing the $ per kWh cost today.

If accurate, it bodes well for EV adoption in the near future, as we should see several long range options that are relatively inexpensive as OEMs begin to pit their offerings against each other.

Still, Mertens finds the price needs to be even lower to achieve high sales in smaller offerings.

“Only when we come well below that price, will E-mobility in volume segments be interesting.”

Audi intends to introduce the all-electric e-tron next year, and has already starting taking deposits on the ~300 mile SUV.  The e-tron Sportback will follow in 2019.  Both will have 95 kWh batteries – which apparent cost Audi around 9500 € ($10,600 USD).

Audi e-tron Sportback – set to arrive in 2019

Further details from Mertens:

  • Asked about ability to make money with e-tron quattro, Mertens said that Audi will make money, but margins will not be as high as in case of ICE
  • some autonomous driving features will be implemented in e-tron, but for sure not fully automatic (Level 5)
  • Audi still believes in diesel and will continue also this direction, assuming 35% BEV and PHEV sales by 2025

source: auto motor und sportHat tip to Jaime!

Category: Audi

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57 responses to "Audi: Claims EV Battery Costs Of Around €100/kWh ($112/kWh)"
  1. MaartenV-nl says:

    Audi does not have a battery factory.
    Who is willing to sell battery at €100,- to Audi?

    Or is he talking about expected price when this car is manufactured?

    1. Rightofthepeople says:

      I would think that is the expected price when this car is manufactured, which is next year. They probably crunched the numbers on how many kWh of batteries they need to meet that 35% BEV by 2025 goal and dangled that in front of LG Chem. “Hey LG Chem, we need this many batteries and think we should build our own factory like Tesla, unless of course you can lower the price.” LG Chem responds, “Um, yeah, how about $112 per kWh?”

      1. FISHEV says:

        LG sells to GM at $140/$125 Euro for 60 kWh 30,000 units so $100EU is not a big leap if Audi were to be offering 50,000 units of 93 kWh, a big enough volume jump to make the discount reasonable.

        1. R.S says:

          Especially since Audi is part of VW, which seeks suppliers for their even more high volume cars.

          Maybe they want to play nice with Audi, to get the VW deal?

        2. jerry says:

          LG’s price is likely lower than that now as $145/kwh was 18 months ago.
          If they design it right 100Euro/kwh is viable even in the lowest cost segments.
          But they can’t admit that or build composite unibody versions 2x stronger than steel that at 40% less weight, battery, cost, could easily compete with low cost
          gas cars.
          I’m building a 63 Vette looking EV version that will only weigh 1800lbs at 175-200 mile range only needing 32kwh as an example.
          Just finished laying up the body and tonight looking a the C4 suspension donor looks like a great choice and lighter than I thought as they get the transmission out I sold in order to get it, the engine, A/C out. Best $100 I ever made. ;^)

      2. Gasbag says:

        I know math and facts are painful for many of you so let me process that for you.

        If it has been 630 days since GM leaked that they were paying $145 per kWh then it has been about 1.73 years since. If the price of batteries is falling at a rate of 16% per year then we would expect the price to be a bit under $108 per kWh.

        On what would anyone base their doubt that the man is talking about costs today and not in the future???

        1. Pushmi-Pullyu says:

          Gasbag said:

          “If the price of batteries is falling at a rate of 16% per year then we would expect the price to be a bit under $108 per kWh.”

          But the rule of thumb is that battery prices have been dropping about 7.5-8% per year. Now, the sudden price drop from LG Chem probably represents a faster drop than the norm, but to extrapolate from that one data point to claim that the rate of decrease in prices has suddenly doubled… well, I think that’s rather jumping to a conclusion. LG Chem’s drop in price is likely to be just an aberration. Even if other battery makers can match that, it certainly doesn’t indicate another 16% drop the next year, and the next.

          1. Gasbag says:

            > But the rule of thumb is that battery prices have been dropping about 7.5-8% per year.

            I think battery density has been improving 7-8% per year. Battery prices have been declining significantly faster. I can’t find the link but I believe IEV had an article stating industry prices had declined an average of 14% per year in the fiver years from 2010 thru 2014 and 16% per year from 2015-1016. Electrek has an article from Jan 2017 quoting a McKinsey & Company study with battery prices having declined 80% from 2010 thru 2016. The McKinsey study is on pack prices but obviously that is a decline of 20+% per year with the cells being the bulk of that.

            Here is one from GM in 2015 saying they would drop from the then $145 to $100 by 2018.

            Here is one quoting 14% drop for 2011-2012;

            Here’s another;
            “A more recent BNEF study found that EV battery prices fell 35% in 2015. It stated that prices fell 65% since 2010”

            Do a simple check of your rule of thumb going backwards and you’ll realize how wrong it is.

            1. Doggydogworld says:

              Articles can quote any decline they want by cherry-picking the starting point. The only company that’s bought batteries in bulk for five years is Tesla. Their financial statements don’t indicate anywhere near 15%/year battery price declines.

              GM’s $145 was not a 2015 price. It was a negotiated price for late 2016 through 2019. Suppliers often “forward price” in exchange for a long-term contract that helps them recover their factory costs.

              GM’s slide clearly showed the price holding steady at $145/kWh until 2019, then steadily declining.

              1. Pushmi-Pullyu says:

                That was my impression, too: That LG Chem’s low, low $145/kWh price for the Bolt EV battery pack was a special long-term contract, and that the price would hold at that level for multiple years.

                But Jay Cole says in a comment in this very discussion thread that LG Chem and Samsung are currently involved in a price war, so perhaps that $145/kWh price didn’t hold as long as we expected it to, Doggydogworld.

                I won’t say Jay is never wrong — so far as I know, he’s mortal like the rest of us (whether human or two-headed llama) — but he certainly knows a lot more about this than I do!

            2. Pushmi-Pullyu says:

              Gasbag said:

              “I think battery density has been improving 7-8% per year. Battery prices have been declining significantly faster.”

              I thought the drop was about the same, but your post caused me to do a brief bit of research.

              I find a Clean Technia article from 2016 which says:

              “…a 2012 BNEF [Bloomberg New Energy Finance] report… found that the average price of batteries used in electric vehicles dropped 14% from Q1 2011 to Q1 2012, and 30% from 2009 to 2012…”

              Okay, a 30% drop in 3 years is a cumulative drop of about 11% per year.

              “I can’t find the link but I believe… prices… declined an average of 14% per year in the fiver years from 2010 thru 2014 and 16% per year from 2015-1016.

              I’m not going to argue over the difference between 11% and 14%. Since the prices EV makers actually pay for batteries are held as trade secrets by all or nearly all EV makers, the best we’ve got to go on is estimates plus the rare slip on the part of someone working for an EV maker.

              Anyway, I concede the point: EV battery prices have been falling significantly faster than energy density has been rising. Thank you for contesting the point; I learned something today! 🙂

              “Electrek has an article from Jan 2017 quoting a McKinsey & Company study with battery prices having declined 80% from 2010 thru 2016.”

              That can’t be right, or at least it can’t be the average. That would be an average decrease of slightly more than 23% per year, and we can be sure the average drop over the years isn’t nearly that fast. Looks like McKinsey & Company based their study on bad data or outlier data.

        2. FISHEV says:

          The math you seem to be struggling with is a 25% discount for an order 2 times the size. The volume alone would justify the discount plus the opportunity to have the world’s 3rd largest automaker engineer your product into their cars.

          LG and Samsung, Audi/VW’s EV battery suppliers are building new plants in Europe and VW guaranteeing a volume to support the plants helps all three companies.

          LG in particular is very aggressive and it has been predicted that LG is aiming to beat Tesla/Panasonic is total production by 2020. Securing future high volume with low prices now is a smart business move.

        3. Terawatt says:

          Yes!! A voice of reason! A numbers guy! You will often have a hard time here, but keep processing!

          Love (platonic),

    2. przemo_li says:

      One possibility that would account for this small price tag is if it was kWh price.

      Battery pack would add some serious % on top of that.

      1. Jay Cole says:

        It is definitely a cell price, not a final/integrated pack price build by a 3rd party (most OEMs bring all that sort of thing in house to be more flexible).

        How much an OEM spends on that stage (based as a percentage of cell cost) can vary wildly depending on the flexibility of the platform to accommodate electrification, and the TMS requirements based on the demand being exerted on the pack, and of course the kWh capacity of the pack.

        ie) one would expect a 60-90 kWH pack in a decently capable EV would have a very low integrated cost ($ per kWh), whereas a 4.7 kWh pack in PHEV supercar (like the McLaren P1) would be off the charts on a $ per kWh basis

        Further to that quote/offer (as technically their first longer range offering doesn’t arrive until next year, so its unlikely Audi has started shipments that would fall under this contract pricing), it has to be coming from LG Chem or Samsung SDI (as VW Group uses both), and as the two OEMs are currently having a bit of a pricing war, each looking to establish themselves and a client base.

    3. R.S says:

      A supplier? You know, the companies that supply goods or services to other companies.

      Like, let’s say, Panasonic sells cells to Tesla. Maybe yo have heard about those two. They even build a factory together!

      1. WARREN says:

        Yup, would be nice if a 10kWh home battery was only $1200 Lol.

        1. ziv says:

          I would like to get just a 5 kWh pack for my home. All I want it to do is be there to power my refrigerator, a small fan and an LED light if the electricity goes out. It would give me 18 to 24 hours to get dry ice or another back up to protect my food. Pretty much everything else can wait for the juice to come back on.

          All of the inexpensive backup battery packs I have seen can’t handle the fairly robust demand that a refrigerator makes when the chiller (compressor?) comes on. It only runs for a few minutes and it doesn’t draw a huge amount of power but the peak load is apparently beyond the capacity of small to medium sized packs.

  2. Ad van der Meer says:

    Mertens said “Derzeit kostet eine Kilowattstunde je nach Rechenmodell rund 100 Euro”.
    The price of €100,= is a theoretical one I assume to be reached when production starts. It’s also not clear if he meant that price to be a cell or pack level.

    Interestingly,the title of the interview is “We believe in the Diesel”.

    Further, he says the price of batteries will have to sink under €100 significantly for BEV’s to become interesting for volume models.

    1. SparkEV says:

      He must mean cell level. Pack price varies depending on how you pack’em. Leaf and eGolf without much of anything other than a box to contain the cells cost about that of cell. SparkEV (2015+) that has cooling plate touching every cell would cost a lot more for the pack even if using same cells.

    2. R.S says:

      No, not really. He says “derzeit” which means right now.

      “Je nach Rechenmodell” means depending on what do you include, usable kWh, total kWh, cell level, pack level.

      They are probably talking about total kWh on a cell level, but who knows. Interestingly their whole pack might only cost $800 more than a Bolt pack!

  3. DC says:

    Germans should unite forces and:
    1) Build one heck of an gigafactory
    2) Apply for all the EU grants there are
    3) Launch a university unit inside the factory, where students get hands on after 1st year of studies
    4) Introduce the German national battery recycling program

    1. floydboy says:

      Kind of ethnocentric for the EU, isn’t it?

  4. Rick Bronson says:

    Please read the last point
    “Audi still believes in diesel and will continue also this direction, assuming 35% BEV and PHEV sales by 2025”

    Yes the VW group still believes in Gasoline & Diesel and so we have to question their claim about $112 / KWh battery. He is just throwing the Euro 100 number to discourage people from buying the Model-3.

    They only believe in 35 % BEV/PHEV in 2025, but Tesla believes in 100 % BEV right away. You choose …

    1. Asak says:

      35% plugin by 2025 seems like a great number to me. Honestly kind of funny that the article is about how they believe in the diesel when they assume such a massive increase in plugins.

      1. MaartenV-nl says:

        Let us assume the €100,- per kWh is true.
        That implies a big and fast decrease in battery prices, between €30,- and €45,- per kWh in 2025.

        Audi is in the Luxury car segment, not the penny pinchers like Dacia, Sköda and Fiat.
        The 2025 exhaust regulations make the ICE powertrains a lot more expensive than they are now. That makes for very expensive powertrains, way more expensive than more capable battery electric powertrains.

        More than 95% of BEV sales in 2025 is more realistic. Audi did not do the math, or they do not believe the quoted prices.

  5. Pushmi-Pullyu says:

    Seriously, an unnamed EV battery supplier is undercutting LG Chem’s famously low price of $145 by that much, and so soon?

    I seriously question this claim should be taken at face value. I wonder if he’s talking about something other than the li-ion batteries used in the latest plug-in EVs.

    Maybe he’s talking about hybrid battery packs using NiMH batteries?

    1. Dave86 says:

      Why not $108/kwh now? As gasbag pointed out, Mark Ruess made the $145/kwh comment in late 2015. Two parts to this cost/kwh equation: time & volume

      * It’s not clear to me why we should be stuck at annual falling battery prices rate of 8% or so per year. The 8% annual rule probably applies to 10 years ago when there was no where near the activity we’re seeing now with batteries (building factories, R&D, manufacturing volume increases, supply chain development, etc.).

      Obviously battery prices won’t fall forever at an annual rate of 8% or 16%. But a serious price drop now seems reasonable.

      * Volume. GM seems to be content to build the Bolt at a rate of 30K units per year. Hence the $145/kwr number Ruess quoted may be based on that volume. Had GM committed to, say, building 300K Bolts per year, then they probably would have gotten a better number than $145/khr out of LG Chem.

      1. Jay Cole says:

        Just as a point of interest, this is the disclosure/slide on Bolt EV cell cost from Barra/Reuss press conference that kicked the whole thing off (and got LG Chem upset at them) in October 2015:

        Sidenote to PP: LG Chem and Samsung SDI both have supply deals in place, so its one of the other. It very well/likely could still be LG Chem. By volume, VAG would be putting down orders many multiples higher than GM (they have ~7 confirmed long range cars across their lineup arriving over the next 3 years, to say nothing of the existing cars/future PHEVs/unkown products).

        I think many times it is difficult to be able to step back from a home market prospective and consider the worldwide effort, and also be inclusive of all the brands inside one family that is making an e-effort.

        1. Dave86 says:

          I definitely agree with your point about perspective. Mine comes from being an electronics engineer for 31 years, including 11 years in high volume consumer electronics.

          Speaking of perspective, it seems like there is a lot of activity with building battery factories in Eurpoe right now. Do I have the right perspective? And it seems like the only battery factory being built here in the USA in the last 5 or 6 years is Tesla’s Gigafavtory. Are we starting to fall behind?

        2. Terawatt says:

          The chart appears to confirms doggoydogworld’s point above:

          > Suppliers often “forward price” in exchange for a long-term contract

          The flat portion of the graph indicates GM has committed to buying some volume of batteries from LG at the same price until 2019. Hence it shouldn’t be treated as a spot price from 2015, just like Tesla’s stock price doesn’t reflect the size of the dividends it pays to shareholders ?

        3. MaartenV-nl says:

          Outside China VAG and GM are about equal in size. And while VAG is world champion in announcing future electrified products, GM is actually building them. (I know VW has some low volume compliance cars)

          The LG-Chem plant in Poland production expectations put the volumes of the cars they are producing for in the (low) four digits.

          If this is an offered cell price for the model years 2019-2020-2021 (three years fixed from October 2018 until October 2021) I can believe this price. This is than the “room for improvement” Nissan hinted at when commenting on the GM deal.

        4. Doggydogworld says:

          Thanks for digging up that chart, Jay.

          I agree with Maarten, this is the price Audi is negotiating today, for high volume delivery in 2019+

        5. Pushmi-Pullyu says:

          Sidenote to PP:”

          Thanks for taking the time to respond in detail, Jay. If you say it’s possible, I’ll certainly take your word for it!

          If VW/Audi will be ordering batteries in significantly greater quantities than GM, then that certainly could make a significant difference on pricing.

          Conventional wisdom is that GM only got the $145/kWh price because GM agreed to let LG build the entire EV powertrain. But sometimes the conventional wisdom is wrong. And even if it was correct when GM made the deal with LG, a price war between LG and Samsung could change things. That “special deal” price may now be the normal price for any auto maker ordering from LG in volume!

          1. R.S says:

            I guess Samsung and LG see Audi as the best way to get the VW MEB supply deal.

            If VW group only manages to get 10% of their cars to be EVs sometime between 2020 and 2025, we would be talking 1 million cars, multiple GWh of batteries and therefore a multi billion dollar supply contract.

            So if I were LG, or Samsung, I’d be sugar sweet, when making deals with Audi.

      2. Pushmi-Pullyu says:

        “Why not $108/kwh now? As gasbag pointed out, Mark Ruess made the $145/kwh comment in late 2015. Two parts to this cost/kwh equation: time & volume”

        Well, let’s say that this debate has been a learning experience for me. And that’s a large part of why I participate. If I say something that is wrong, then hopefully someone will point that out. That’s the way internet discussions ought to work; the “cream” of the best arguments should float to the top, as it were.

        Anyway, the clincher here for me was Jay Cole saying that LG Chem and Samsung are in a bit of a price war. Until he said that, I didn’t believe anyone was gonna undercut LG Chem’s famously low price of $145/kWh for the Bolt EV, at least not for 2-3 years*. But okay, if there is a price war, then that price floor could certainly drop away.

        *There are a lot of people claiming that Gigafactory battery prices are even lower than $145/kWh. But even if that’s true (and I think we’re a long way from proving it is), Tesla almost certainly won’t soon be selling any of those to Audi or any other EV maker. Certainly not soon, and maybe never.

  6. Rich says:

    What’s the price of the Audi e-tron quattro wagon? The vehicle price compared to capability is the only thing that matters.

    1. FISHEV says:

      Current FWD e-tron maxes at $48,000. Bigger battery $8K and AWD $5K would be $60K, call it $65K and this is maxed out luxury AWD Audi getting 300 miles.

      That’s a better deal than a Model 3 AWD as the Audi has the more useful station wagon design and likely a better fit and finish than the Tesla.

      1. Rich says:

        Average optioned Model 3 will be $42K (before tax credits). If the equivalent e-tron quattro wagon is $7K to $10K more, they might attract some Model 3 buyers. Some people will pay more for the wagon option and a nicer interior. This assumes Audi is one of the companies negotiating to use Tesla’s charging network. IMO – At $20K more, it won’t be competing against the Model 3. It’ll be in it’s own market segment until the Model Y releases in 2019.

      2. pjwood1 says:

        Current e-tron is mostly a gas car? Why not just get a hybrid?

        Maybe independent of badge, people want FWD but RWD is sportier. The Tesla has better traction control.

      3. says:

        16m of electric range and you are comparing it to Model 3? That car is useless as an electric.

        1. FISHEV says:

          “16m of electric range and you are comparing it to Model 3 That car is useless as an electric.’

          Don’t think you are following. The comparison is the new Audi etron Quattro.

          1. Current Audi etron maxes at $48,000
          2. Current etron has an 8.8 kWh battery
          3. New etron has a 95 kWh battery. Adder $10,000
          4. New etron has AWD drive. Adder $5,000
          5. New etron has ~300 mile range
          6. New etron estimated sale price $65K
          7. Model 3, AWD, 75 kWh battery, Autopilot $56K

          I’d buy the Audi, more range, better design (hatchback), better fit and finish, better colors.

          That’s the Model 3 75D vs. Audi etron Quattro comparison.

          1. says:

            Ah, i see. I thought you were talking about the existing car not the future one. I would still buy the M3 if i needed a car….i rather support a company that is all in for evs. I will probably replace my eGolf with one in a year or 2.

            1. FISHEV says:

              And Tesla is US made but the Model 3 seems rushed to market with a lot of design issues that Musk agrees with but didn’t fix, the hatchback issue, towing, the single offset computer screen for instrumentation, the statements that Model 3 is low tech and if you want high tech, you need to buy the Model S, the fit and finish issues that current owners keep bringing up on the S and X.

          2. MaartenV-nl says:

            A little nitpicking from the accountants point of view.
            The €100,- per kWh is likely cell price. Add 20%-30% to assemble into battery modules. Add another 10% BMS and power electronics. That is close to $14,000 for the battery before it reaches the assembly line.

            Audi needs a margin on its products like 20%-30% after it leaves the assembly line.
            To use $16k – $20k for the battery in your (very good) example is probably more realistic but would not change much in your conclusions.
            Like I said, nitpicking 😉

            1. Doggydogworld says:

              Good points. Also need to subtract $$$ for ICE removal and add $ for larger e-motor.

  7. pjwood1 says:

    Pretty interesting Audi is (claiming) aiming top-down, like Tesla, and not going with an econo, margin killing, misfit.

    1. Terawatt says:

      Actually it would be much more interesting if Audi were claiming to be aiming for “an econo, margin killing, misfit” as you so eloquently put it.

  8. floydboy says:

    Damn, put some side windows on these things! The beltline is becoming a neckline!

    1. Terawatt says:

      This is because Audio designed the car to look more like the people who but them ??

  9. Someone out there says:

    Swanson’s law says that on average, technology cost drop by 20% for every cumulative doubling of production. The more EVs and renewable energy storage that is produced, the more the price drops and we’re seeing that with falling battery prices. This in turn makes EVs and RE storage even more attractive and the avalanche of the S-curve gets going.

    1. Terawatt says:

      My brain did a funny with this and I actually read it as Someone’s law! Ell-O-ell!

  10. Terawatt says:

    With everything that’s happening between now and 2020 I ought to cancel my Model 3 and just remain committed to my ugly but trusty, and cheap LEAF.

    But I don’t know if I can help myself. The thought of several more years of waiting is one thing, but the worst is that it will be much the same situation in 2020, in relative terms! Obviously you’ll get more for your money then, but it’ll just be “with everything happening by 2025…” instead.

    And after that it probably won’t even make any sense buying a car, if autonomous cars do to car ownership what I think it will.

    1. MaartenV-nl says:

      Just put the 40kWh battery upgrade in your Leaf and wait for future developments.

  11. Serial anti tesla troll thomas says:

    VW will produce its own batteries. R&D already started. R&D and manufacturing placed in Salzgitter, Germany.

    1. Jay Cole says:

      In theory they could, currently they have a small test facility being set up, but there is no covenant to actually produce them for their upcoming EVs.

      Many automakers have side projects, test facilities that dabble in the proposition of making their own cells (and some do in small quantities).

      However, the huge scale and drastic (and continual) cost per kWh reductions seen from the 3rd party battery suppliers has overrun all the OEM’s designs on truly building their own (even Tesla is not actually building their own, they are buying into equity sharing with Panasonic to recoup/reclaim a percentage of the profit margins, but mostly to control their own supply chain) …the risk vs reward proposition of going it alone against LG, Samsung and Panasonic is a total non-starter.

  12. bogdan says:

    The good news: current price/kW 100€
    The bad news: AUDI is waiting till the price /kW goes down to 0€.