Hyundai Exec Thinks EV Battery Prices Will Stop Declining In 2020

JAN 11 2018 BY MARK KANE 60

Hyundai Motor Co is investing heavily in the plug-in electric cars, but Senior Vice-President Lee Ki-sang (who oversees Hyundai’s green car operations) spreads concerns of battery prices that could stop declining in 2020.

Year 2020 ahead of us!

What exactly will happen in 2020 to stop the long-term trend of falling prices one might ask?

Well, according to Lee Ki-sang, the key ingredients are expected to become more expensive.

“Not a single ingredient is going in a positive direction in terms of pricing,”

“So far battery prices have been declining at a rapid pace, but the pace will moderate significantly or maintain the status quo by 2020.”

If the ingredients (like nickel, cobalt and lithium) cost more, then all the weight of progress will fall on technology.

Because batteries are the most expensive part of most plug-in electric cars, then affordability will be tougher to achieve.

Interestingly, Volkswagen is looking to secure long-term supplies of cobalt, but so far hasn’t had any progress in that regard.

“In September, Reuters reported that Volkswagen was moving to secure long-term supplies of cobalt for the group’s electric vehicle plans, but its talks with cobalt producers in November ended without a supply deal.”

Source: Reuters

Categories: General, Hyundai

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60 Comments on "Hyundai Exec Thinks EV Battery Prices Will Stop Declining In 2020"

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I agree. Not much decline will happen with prices of nickel, cobalt, and lithium soon. Mass production will be a factor tho IMO.

Paul Stoller

This report is near worthless as it doesn’t account for tweaks to the chemistry, much of the work being done on batteries has to do with making more use of the active ingredients so one cannot assume the same amount of materials in future tweaks to the chemistry involved.

Cost reductions have come from and will continue to come from not only optimizing the manufacturing, but in optimizing the chemistry involved.

While rising raw materials costs are a concern I think it’s a huge leap to then claim further reductions aren’t possible due to those rising costs, in fact rising costs are a huge motivator in finding ways to use less of a given material

Nix

Yes, Argonne National Laboratory just recently found a way to replace Cobalt ($75,000 a ton for raw ore) with iron ($75 a ton for raw ore).

That’s a substantial potential price cut in raw materials just with a simple substitute. And they are also seeing a substantial improvement in performance at the same time, with a theoretical 8x improvement: “your phone could last eight times longer or your car could drive eight times farther.”

L'amata

I wonder if they could use Stainless Steel Iron will oxidize & turn to powder.

leafowner

It will likely be an Iron compound – not pure iron

Dan

Stuff of dreams, a long way from the lab to something that works for 1000+ charging cycles in the real world. Don’t hold your breath.

Nick

Remember this was also said twenty years ago when most batteries were nicad and lead acid.

przemo_li

Current battery tech neither have 1000+ deep cycles lifespan.

It’s just that battery degrade under specific conditions that can easily be avoided in real life in car batteries.

Hence Panasonic/Tesla batteries degrade mostly due to time (~1% per year).

So this new tech may also be amenable to “gloved hands” treatment that prolong it’s lifespan to required length.

Reduce Reuse Recycle!

Everyone always seems to forget about recycling. The contents of the battery aren’t lost as the battery ages. So theoretically, at some point, we’ll have mined enough of it and can just re-use what we already have.

David Murray

This is true. But it will be at least 15 to 20 years before enough EV batteries start to be recycled to make any impact on this. So for the for the near future we will depend on fresh sources.

carcus

From what I’ve read:

It is difficult and expensive to recycle lithium back into a pure enough state that it can be used again in batteries, .. which is why lithium is currently recycled back as lubricant.

So once the pipeline fills up (i.e. all the lithium grease the market can handle), EV owner’s will have to pay to have their batteries disposed/recycled, or the recycling will have to be subsidized with gub’ment funds.

Lawrence

It’s FUD unless you can produce credible articles.

“I read somewhere” is as credible as “someone told me one time.”

earl colby pottinger

On top of that for a number of decades the batteries that fall below say 80% of their original storage will be re-purposed as stationary batteries for home/industry use.

Pushmi-Pullyu

Tesla says it plans to start recycling batteries, but that may not happen soon. From what I’ve read*, the reason why we’re not seeing large-scale recycling of li-ion batteries is that most of the materials in the batteries, such as lithium, are too cheap to be worth recycling.

I do wonder, though, why the cobalt isn’t worth recovering.

*Another unsourced claim! 🙂

http://kunr.org/post/what-do-we-do-all-teslas-lithium-ion-batteries#stream/0

ItsNotAboutTheMoney

I think the cobalt might have been worth recovering, but manufacturers have generally worked to reduce it in favor of cheaper metals.

Battery recycling is kind of being punted a bit just because the volume isn’t there yet.

But, a lesson from the past is that Honda stockpiled old hybrid NiMH batteries, until recycling and commodity prices caught up with it.

Mint

Lithium is a minor part of battery cost. It’s the other parts that are more important to recycle.

Bruce Miller

Call in SGS Lakefield! They develop such processes.
Don’t forget: Groupthink around low voltage Li systems just may be in error. Hydrogen gas systems, with a few more advances, may prevail. This is just the beginning. The whole region around High voltage chemistry and materials are being worked hard, and especially in China. The “US Science Supremacy” model has been smashed by China’s lead in supercomputers and Artificial Intelligence. When more HV immune materials are found for SuperCapacitors we will see a change. Keep in mind: higher Voltage systems are likely to be smaller and lighter. The whole science of toroid transformers has yet to be explored and even low level nuclear has been suggested.
Academic Science belongs to China today. Expect the miracles to come from China, not an America locked into Li Groupthink.

SJC

The next price reduction could come with energy density increases. You have to make fewer cells for the same energy storage it costs less.

zzzzzzzzzz

SJC:

Toyota already stated that with all the great features that solid state batteries supposedly will have, price reduction is not one of them. You will get some car price reduction from lower weight and size, but you still need the same expensive raw materials for cathode.

Pushmi-Pullyu

I certainly would not expect initial prices for solid state batteries to be lower than current prices for EV batteries. In fact, likely they will be higher, since it’s new technology.

But if manufacturers can start making batteries using the same industrial processes they use for making electronics, then the prices for solid state li-ion batteries should drop very rapidly indeed, after the initial introduction, just as the prices for all consumer electronics have dropped precipitously over time.

SJC

I was not referring to solid state only but but energy density advances in general. Few cells with higher energy density lead to lower costs.

mx

Toyota has a vested interest as an 98% ICE maker to hold back actually converting to solid state, and delaying it’s launch.

Bruce Miller

Toyota is not American, is not controlled by the same business criteria as an America Corporation and seeks ROI over longer terms than the typical “rip and Ship” fast turnover for rapid profits, American systems that gave us a rash of cars sold under “Hard Sell” conditions, even with wings on them? Toyota answers to a World Wide Clientele, and produces highest quality, most recent technology vehicles for that market.

mx

I disagree.
I’ll listen to Panasonic’s CEO for battery info.

Nix

He fails to take into account that new mining operations are scheduled to come online between now and 2020 (and beyond). Canada, Argentina, the United States, etc all have major projects under way to produce required raw materials.

There certainly may be some temporary tightening of raw material supplies from time to time in the coming years, but nothing to justify claiming a complete halt of price improvements in 2020.

mx

Yes, this. Lithium ETF’s are being heavily pumped on the stock market right now. The money is moving in.

Julie

I expect a surge in demand around 2020 as many new models are introduced. I predict that demand will increase much faster than supply creating a shortage of EV batteries. I don’t think that the auto industry will have time to modify its supply chain to deliver EV in the quantity that we would like to see.

I like the strategy that Tesla has adopted, first establish the battery supply chain, then introduce a mass market EV. The other car manufacturer will soon have to fight to secure batteries from LG, Samsung and Panasonic if they want to sell EV in any significant number.

I hope that I am wrong and that the industry will be able to adapt but designing an nice EV with good range is the easy part. Being able to produce 500 000 unit a year is the real challenge as it required huge change in supply chain for traditional automakers.

zzzzzzzzzz

Julie:
Tesla doesn’t have any supply chain. They just buy from Panasonic and hope it all will sort out by itself because of magic free market wand. The problem is that almost all cobalt is byproduct of copper and nickel mining.

You need Cobalt price increase by orders of magnitude before it would make sense to bring unprofitable copper mines back into production and oversupply copper just because of cobalt demand. It may take decade to start new mine and reach operational status.

Tesla has some advantage with NCA chemistry as it needs less cobalt than current NMC. But NMC 622 and NMC 811 that are supposed to go in production in next few years also need less cobalt.
https://www.bloomberg.com/graphics/2018-cobalt-batteries/?cmpId=flipboard

L'amata

They can always re activate old proven mines that are placed on Maintanance/hold, fairly quickly . If they are feasible enough.

Pushmi-Pullyu

zzzzzzzzz posted more anti-Tesla FUD:

“Tesla doesn’t have any supply chain. They just buy from Panasonic…”

Once again we are reminded that we should not believe anything posted by a serial Tesla basher.

Tesla is in charge of supplying Gigafactory One with raw materials and pre-processed materials. For example, it was Tesla, not Panasonic, which negotiated with a local Nevada lithium mine for supply.

http://fortune.com/2015/09/16/tesla-lithium-gigafactory-nevada/

Doggydogworld

Tesla has a vision of bringing raw materials into the GF, but that’s not how it works now and not how it will work anytime in the foreseeable future.

Panasonic buys NCA powder and other pre-processed (not raw) materials. Panasonic makes cells. Pansonic ships these “across the wall” to to Tesla, who assembles them into packs.

The GF lease/purchase agreement with Panasonic is included in Tesla’s SEC filings. There is not one word about Tesla supplying raw materials. It simply does not happen outside the minds of certain willfully ignorant Tesla fanboys.

mx

Someone needs to look up the word: “Partnership”.

jahav

> Someone needs to look up the word: “Partnership”.

Tesla and Panasonic are not in partnership. They are independent contractors, per many SEC documents(e.g. GENERAL TERMS AND CONDITIONS [between Tesla and Panasonic]). It explicitly states that they are not in partnership.

> A partnership is an arrangement in which two or more individuals share the profits and liabilities of a business venture

https://www.sec.gov/Archives/edgar/data/1318605/000119312516735804/d253219dex102.htm
> 16.5 Relationship of Parties. The Parties are *independent contractors* under these General Terms and the Contract and *no other relationship is intended, including, without limitation, a partnership*, franchise, joint venture, agency, employer/employee, fiduciary, master/servant relationship, or other special relationship. Neither Party shall act in a manner that expresses or implies a relationship other than that of independent contractor, nor bind the other Party.

Ambulator

I’m rather hoping that lithium sulfur lifetimes can be improved enough that we can eliminate nickel and cobalt from batteries. That would allow a substantial reduction in raw material costs.

JyChevyVolt

10 years away.

SJC

Oxis has lithium sulfur today, they are improving cycles as part of development.

Someone out there

Well the price of the finished product can’t be lower than the sum of the constituting ingredients and at least some of them have been rising.

The real price drops will come from research into better and more energy dense batteries.

przemo_li

“Real” ?

:]

There is nothing unreal about lowering price tag of assembled battery pack:
* by building them by the hundreds of thousands instead of thens of thousands
* by building them in one place as opposed to scattering in distant geographical parts
* by buying tools and machines in bulk
* by optimizing production speed by influencing design of all lines almost simultaneously

There are plenty of ways in which real savings can be had when production will be scaled up by two orders of magnitude!

Someone out there

All of those advantages are already priced in. There might be marginal advances still left to do but it will not move the price much. Batteries are already a low margin product.

Nix

One thing to keep in mind about raw material pricing, is that it is based upon speculators.

It is certainly arguable that current raw material prices are artificially high due to the massive influx of speculators into battery materials in recent years. So it certainly could be that current raw material prices might resemble US housing prices in 2007 before the housing crash when prices dropped quickly.

Or oil prices around the same time.

So prices may very well go up in the short term, just to crash back down in the long term. So he could be right for a while, then wrong as the speculation bubble bursts.

Get Real

There is really no need to worry about lithium as it is plentiful and fairly easily mined.

It is also endlessly recyclable.

If they can find substitutes for Cobalt then all will be good as even Nickel is fairly common.

I think this is really another distraction as battery research is progressing very rapidly and solid state batteries are not far away at this point.

Remember, higher pricing will drive even more research and innovation into substitutes and new chemistries.

Also what is hilarious is that Elon Musk’s “First Principals” engineering approach is again showing how astute he was to plan on massively increasing battery supplies and lining up their required raw materials long before the laggard OEMs even had a clue.

Another Euro point of view

OK, but then again Elon Musk probably couldn’t care less as selling cars at a profit seems not part of his business model. So for profitability concerns I would be inclined to rather listen the “others”.

Counterpoint

Thus far, it seems like Tesla’s profits are all being re-invested back into the company for Model 3 production, solar roof production, battery backup installation, and Supercharger rollout. And thus far, they haven’t been enough to offset the costs of these additional ventures.

You may say that is proof Tesla poorly manages their finances, but I see it as evidence that the company is serious about investing in and being a leader in an energy and transportation architecture. They likely expect to make up their investments (and more) on the back end as these technologies become more widespread and eventually ubiquitous and Tesla is the name brand everyone will recognize.

przemo_li

Pfffffffffffffff

Amazed at number of people from countries with capitalistic economy who repeat that with straight face.

Tesla do a lot to have profitable S & X. And both are. Right now Tesla have significant margins over those models.

You mix scaling up beyond what’s possible when relaying on just the revenue stream, with going bankrupt.

Let me reiterate. Tesla is company. Company have to be profitable or on the path to profitability or on the path to greater profitability. Nothing else works.

Tesla just have this nice extra that their core business actually help save humanity from troubles (and horrors) of global warming, while still being profitable!!!

God/Bacardi

Read between the lines…Who at Hyundai said this? “Lee Ki-sang”…Google “Lee Ki-sang” and “fuel cell”, get:

“With exceptional efficiency, serene styling, and uncompromised performance, our next generation fuel cell SUV is the true epitome of an eco-friendly vehicle of the future,” said Lee Ki-sang, senior vice president of Hyundai’s Eco Technology Center”

Part of Ki-sang’s job is to keep the fuel cell investments coming in, his salary and job depend on it…

zzzzzzzzzz
God/Bacardi: Hyundai produces what people want to buy. They are serious for profit business accountable to shareholders, not a bunch of half witted fanboys subscribing for conspiracy theories and worshiping some bipolar idol. Lee Ki-sung is also managing director of Hyundai R&D Division and his salary depends on a lot of things. Fuel cell or Li Ion battery is yet another task for him. Hyundai/Kia expects to have Kona, Niro, Soul and Ioniq BEV soon. That is at least 4 models vs 1 or 2 FC model. Now if all this variety of BEV choices and government mandates can’t fix limited range and slow “fast” charging issues, it isn’t Hyundai’s fault. Face it, 99% of population driving trucks, SUVs and cars refuelable in 3-5 minutes are not going to get excited by possibility to join some battery worshiping cult and enjoy long hours at chargers, especially the majority of the world population that don’t have any electrified parking at home. Hyundai NEXO is obviously superior choice for them if zero tailpipe emissions are mandated and infrastructure is developed. 370 mile range, 3 minutes “charge” to 100% (not 70-80%), starting at -30 Celcius with no buts. Just like normal car. And… Read more »
Pushmi-Pullyu

zzzzzzzzzzz said:

“Hyundai produces what people want to buy.”

Know anybody who wants to buy a fool cell car? Well, I don’t either. Nor have you bought one yourself, despite your very persistent fool cell fanboy posts.

Hyundai (and Toyota and Honda) are not making fool cell cars because anybody actually wants to buy them. They are making fool cell cars because the Japanese government is subsidizing them at up to almost $20,000 apiece!

https://insideevs.com/japanese-government-offer-20000-subsidy-fuel-cell-vehicle-purchases/

RCM

Who waits around for their BEV to charge? I sure don’t! It literally takes a few seconds to plug it in at night, then another few seconds to unplug the next day before heading off to work. Actually quicker & easier then going to pump gas for my ICE vehicle. There’s a fairly sizable market for folks who own more then one vehicle and have electricity in their garage for over-night charging.

Going on a long trip? No problem just take your other car, not that big of a deal. My BEV is perfect as a “daily driver” and I rarely ever drive my ICE car anymore.

You seem to think it must be “all or nothing” for BEVs to work and be practical, which is a close minded way of thinking.

Another Euro point of view

Of course we will find way to replace cobalt and new cobalt mines will be exploited resulting in a price drop, however what some of you above seem to fail to grasp is that those changes will not come in like 3-4 years as it takes longer from lab to battery mass production and as opposed to what some seem to think new mines cannot be exploited in a mater of 2-3 years, but more like 5 to 10 years. Executives at Hyundai, Toyota, BMW etc. are a lot more knowledgeable or better advised on the subject than anyone here I am afraid. It should be rather obvious and I am still flabbergasted it seems not.

Pushmi-Pullyu

Another Euro FUDster said:

“Executives at Hyundai, Toyota, BMW etc. are a lot more knowledgeable or better advised on the subject than anyone here I am afraid.

ROTFL!
😆 😆 😆

The quotes about the near term future of battery prices from a Hyundai exec here are… Well, as I said in a previous post, I hope he knows that what he said is bull pucky, because if executives at Hyundai are really that ignorant of the future of their industry, then that’s rather embarrassing for Hyundai!

And if you think he’s right, well… I’ll let readers here finish that sentence for themselves.

Don Zenga

Now we know why Hyundai/Kia are selling compliance cars. Hyundai is another engines company that makes vehicles for roads, farms, mines and water and they will not move fast into plugins. But Chinese (electric) Pandas are coming, they run, they swim, they fly and they are going to kick in the face of Hyundai.

ffbj

Bucolic Speculation.

stan1

In his defense, experts working in a given field nearly always underestimate the combined field’s ability to innovate.

stan1

Actually, not sure this field myopia issue applies. There’s no indication this fellow has any real specialization in the battery cell field.

The pace of uptake can certainly negatively effect input material availability and prices even for something as ubiquitous as sand on a short term basis. The problem here is the implication that it is anything more than a short-term slow down or even that all firms face the same constraints.

ModernMarvelFan

If I remember correctly, raw materials only account for about 20% of the battery cost.

The rest are labor, equipment amortization, overhead, capital, investment in technology amortized, yield and profit. But that was done when battery was $300/kWh.

So, technically speaking, at some point it will reach a floor. The question is really whether we will reach that by 2020. If so, that means that at some point the basic raw materials plus overhead and yield and profit will determine the lowest cost possible. If the process is highly automated and at extremely high volume, then the cost of the product will quickly approach raw material cost. That is what Tesla is striving for right now.

If we “believe” the so called $300 number and 20% material cost, then the lowest cost for the “current mixture of chemistry” is potentially $60/kWh.

And that is good enough IMO. A 100kWh would only cost $6K which is more than low enough to have widespread of EVs.

Pushmi-Pullyu
Hyundai spokesman said: “Not a single ingredient is going in a positive direction in terms of pricing,” “So far battery prices have been declining at a rapid pace, but the pace will moderate significantly or maintain the status quo by 2020.” Well, I actually hope this is just EV bashing from a legacy auto maker. At least I hope he knows enough to realize what he’s saying here is complete bull pucky. In the first place, the cost of raw materials only a small part of the price of batteries. The bulk of the cost for manufacturers is the cost of manufacturing and/or the cost of pre-processing the ingredients. And the reason why battery prices have been dropping so fast lately is a combination of scaling up production and increasing cost efficiency in the manufacturing process. If the cost of raw materials was actually a large fraction of the total cost, the it would be impossible for battery prices to drop as fast as they have over the last 3-4 years. The claim that battery prices are actually going to go up because of rising prices for raw materials, is exactly the FUD we see all the time from people… Read more »
Doggydogworld

“The claim that battery prices are actually going to go up because of rising prices for raw materials, …”

He didn’t make that claim. He said price declines would flatten out.

A kWh of nickel-rich cells (NCA, NMC811) contains ~0.75 kg of raw nickel ($8), 0.1-0.15 kg of Co ($10) and 0.11 kg of lithium ($3). Copper, graphite, etc. add another $10 or so. Processing is energy intense and already done at scale, roughly doubling these costs. That gets you to $60/kWh or so in processed materials. Add a reasonable amount for high volume manufacturing and you get a “floor” around $80-100/kWh. As you approach the floor your cost curve flattens out. That’s all this guy is saying.

JoeInTheUk

I think what Julie posted back further is on the ball, it’s nothing to do with raw materials at all its supply and demand.
And it looks like by about 2020 there will be a short term Imbalance with all the new BEVs with much bigger batteries and a minority of the investment money that’s going into battery production bearing fruit by then.
When the price of Beanie Babies soared in the late 90s it wasn’t due to a shortage of raw materials 🙂

Steven

Perhaps that arc of the curve will change, but I believe it will continue a while longer.

darth

It is possible we could have a situation where materials prices go up briefly, similar to silicon prices when solar began cranking up a few years ago. There was a brief price spike until production ramped up, then prices fell again. At worst it will only be temporary.