Lithium-Ion Battery Price Outlook By SAE International

AUG 28 2015 BY MARK KANE 52

Panasonic's 18650 Lithium-Ion Cell For Tesla Model S

Panasonic’s 18650 Lithium-Ion Cell For Tesla Model S

SAE International, using Lux Research’s lithium-ion battery report, released price outlook at the pack level.

Most sources indicate Tesla Motors (Panasonic cells) as the leader in price per kWh, while the industry average stands at some $400/kWh.

“The Lux report estimates that by 2025, Li-ion EV battery pack prices from a leading manufacturer such as Panasonic should fall to $172 kW·h, while the “laggard manufacturers” should achieve pack prices around $229/kW·h. Most automotive packs currently cost around $400/kW·h.

Laslau said a $200/kW·h pack price is considered to be the entry point to a large-scale EV market. EV sales would truly take off at a $100/kW·h price point, according to the U.S. Advanced Battery Consortium.”

Battery costs are kept secret, so we not only don’t know the true value, but there is no way to forecast prices in the future, because we don’t know the technology of the future or other factors.

Broad take off could begin at $250/kWh, which enables 50 kWh packs for $12,500 for well over 150 miles of EPA range.

Battery prices

Battery prices

Source: SAE International

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52 Comments on "Lithium-Ion Battery Price Outlook By SAE International"

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So by 2020, they expect competitors to have battery prices that were on par with Tesla 3 years ago? Sounds reasonable.

An interesting take when Tesla is selling their PowerWall model’s 3kw difference for $166.6/kwhr retail.
And Tesla’s CTO said recently they would be $100/kwhr in 2020.
And 4 yrs ago I bought the same cells the Roadster used for $250/kwhr in 5,000cell lots for 1 EV.
All while Lux, Pike were selling reports how costly cells were when I was buying for 50% less retail quality cells.
One would have to wonder about them from their 25 yr long record I’ve watched of being badly wrong on the expensive, big auto side.
One would have to conclude they are getting paid for results and not to be believed.
The final fact as the price graph shows neither the Bolt, Model 3 can be made with more than $200/kwhr packs.

What a joke. How many experts predicted five years ago, when oil was over one hundred dollars a barrel, that it would be at forty now? The entire global economy runs on fossil fuels. There is no consensus on the price of oil a year from now, let alone ten years. So how do they figure the cost of manufacturing anything?

“So how do they figure the cost of manufacturing anything?”

Manufacturing primarily requires electricity, and electricity doesn’t burn much oil at all. Electricity rates are fairly predictable, and less susceptible to fossil fuel price swings.

Unless you are talking Japanese products since Fukushima. Of course most of what we buy is made using Chinese coal fired electricity.

That said, EVs are better because they don’t pollute while sitting.

https://www.washingtonpost.com/news/opinions/wp/2015/08/26/thursday-cartoon-u-s-traffic-you-are-here/

Freedom machines! 🙂

Not to mention that the entire roof of the battery plant is covered with solar panels.

For batteries, I would think the market price of metals plays an equal, if not greater role. And the world market for metals are somewhat volatile compared to electricity prices.

Refining OIL takes electricity. Aboput the same as driving on electric in the first place.
OIL is low becuase of short sighted Fracking, Once we stop that it’s back to $4-5 a gallon, Stop subsidies and it $8-12 like in Europe.
OIL is also running out, maybe not before we all drownd from floods ,sea level rising and droughts.

Simple math says a 24kwh pack from Nissan retails for $5500=$220kWh so the future is already here for the leaders! Considering Gigafactory larger 26650 batteries will drop Tesla cell cost to $130/kWh and you can see this chart is off by at least 3-5 years! In other words completely wrong!

The $5500 price requires that you trade in your old battery pack. I’m not sure how much the old one is worth but it ain’t $0.

Since the theory is your old pack is dead (Early Leaf batteries had lifetime issues in hot regions) any residual value would be minimal. At one point Nissan said old packs were worth $1000, but would not give anyone money for old packs. This is still less than $275 /kWH. And it is all retail pricing so their cost may be 50% less which nets out to $137.50/kWh based on typical profits for parts.

That’s a pretty bad theory. If it was really worthless then they wouldn’t want it back. It has value but who knows how much.

And since they are the ones that make the pack, they can just run them through their QA testing, replace the weak cells, and then have a nice reconditioned pack.

An alternative reason may be to try to prevent freelancers using their battery packs in home built vehicles?

Rob, the Leaf pack gets returned when it dips below 70% of 24 kWh. That is approximately 16.7 kWh of pack left. That is a valuable commodity. I would imagine it is worth at least $2,000 and perhaps as much as $2,400. If you keep that pack in an airconditioned home/facility, it will probably take 3 or 4 years to drop below 12 kWh. The Tesla Powerwall is only 7 or 10 kWh.

Since the theory is your old pack is dead (Early Leaf batteries had lifetime issues in hot regions) any residual value would be minimal. At one point Nissan said old packs were worth $1000, but would not give anyone money for old packs. This is still less than $275 /kWH. And it is all retail pricing so their cost could be less.

Ah, no. That’s a trade in price and they lose money at that price.

Nissan may be willing to lose some money at that $5500 price point, just to keep a few customers happy.
I wonder how many they’ve actually sold, versus replaced for free under warranty.

Two things overlooked when valuing a 24 kWh pack at the trade/swap value of $5500.

1. It ignores the $1500+ core value (which implies a $300/kWh minimum current cost). This likely doesn’t include the full value, as a recyclable pack has after market vailue which has not been explicitly stated (from a secondary 5-10 year life in stationary energy storage).

2. These $ per kWh are typically pure cell costs and don’t account for the pack materials and electronics. (this varies based on complexity of electronics, and other systems like active cooling/heating)

A good anology is comparing fabric cloth prices to cost of dresses, or suites. While there is a relationship between cost and price the price per sq.ft. (m^2) of clothing is vastly different from the fabric.

I remember Nissan saying in an interview that they lose money on the $5500 (even after factoring return of old battery) but that they are willing to do that because they don’t anticipate many people taking up the offer. They had to do it because of loss of confidence in their battery after the whole heat issue.

Elon said a year or so ago that they paid Panasonic less than $200/kwhr. This is the cost of batteries only and does not include assembling them into packs. Pack price for Tesla is probably about $300/kwhr now and will be significantly cheaper once the Gigafactory is up and running.

Given Nissan is at $220/kWh at the pack level retail today, Tesla has to be closer to $200kwh at Pack level today.

@Roy
Actually materials are a big percentage of the batteries cost. Around 70%.

I don’t understand all the data… How does LG Chem have more expensive batteries than GM (who use LG Chem)?

Shows you how good GM is at beating up its vendors. 🙂

Are the comparisons apples to apples … ie: both at the cell level, or both and similarly engineered pack level?

Another consideration is price quotes between MSRP, and a contract covering 25-50,000 vehicles. (a potential year of production for a vehicle like the Volt). ie: Both GM & LG omitted many finer details.

J.B. Straubel said we’re on the verge of a free fall battery price drop, like solar does.

Probably based on what he knows about the Gigafactory. So free fall implies lower than my estimates, maybe $100/kwhr?

JB recently said packs would be $100/kwhr in 2020 so you are good.

I want to believe. But I need evidence. A roadmap.

I’m with you – I think the $100/kWh by 2020 is very optimistic. I’m estimating (pack prices) $180/kWh by 2020 and $125 by 2025. I believe Tesla is around $275 today for the automotive pack and $250 for the stationary packs (Powerpack). The stationary cost will go down to $200/kWh when the GF opens up next year. When Tesla moves automotive pack production to the GF (2017?), that will go down to $250/kWh. And then 10%/yr price reductions for the first 5 or so years (to 2022) and then tapering off slowly from there (5%/yr) to 2025.

Still, $125/kWh means a 60kWh pack for $7,500 or so. And a 100kWh pack for larger vehicles (SUVs) for only $12,500.

The cost of materials is cheap. It’s almost all in the manufacturing so what is needed to drive prices down is a high degree of automation. This high capital cost must be amortized over high sales volume. This is exactly what the Gigafactory is all about. I have a hard time believing they will have 4000 employees there, to get their target cost of less than $150/kwhr I would expect the factory would be designed to run with only about 400 employees.

Musk is a VERY ambitious man. I suggest you read his biography, by Ashlee Vance, or take the time to read some very enlightening (and long) articles on :

http://waitbutwhy.com/2015/05/elon-musk-the-worlds-raddest-man.html

The Gigafactory is huge and will produce also for the Powerwalls. Demand is strong and This GF is not named GF1 for nothing! There are many more to come.

It sounds like someone has a VERY big crush on Elon. 😉

It seems ambitious men often make poor partners.

“COST REDUCTION: We felt comfortable with at least a 30 percent reduction in cost just based on the location and economies of scale. That’s without taking any technology improvement into account, and we’ll certainly do technology improvement. If we can’t get to 30 percent without technology improvements, someone should shoot us, because that would be in complete defiance of economies of scale and obvious cost savings.”
http://teslamondo.com/2014/11/06/q3-conference-call-excerpts/

It’s also risky to have such a large percentage of your battery production coming from one gigantic factory, kind of like keeping all your eggs in one basket. One major fire or natural disaster would knockout a very large percentage of Tesla’s battery production. Since the Gigafactory will be processing raw metallic lithium into batteries, Tesla must have installed some fire suppression system that doesn’t use water, which reacts with metallic lithium. If the fire is not contained quickly by the fire suppression system and Tesla Gigafactory employees, then the small town fire department (volunteer? I don’t know) is the next line of defense to put out a growing hazardous materials fire at the ginormous Gigafactory. The local fire department would most definitely need to immediately call for help from surrounding towns in this remote and sparsely populated area to help battle a haz-mat fire at a facility as large as the Gigafactory.

I have heard Tesla is using lithium hydroxide, not metallic lithium. There is little fire danger from that.

I thought Tesla was going to ship lithium carbonate (raw lithium?) from the mine straight to the Gigafactory where it will be processed, cutting out the middleman.

Lithium carbonate is already processed from the lithium ore. Typically they take the lithium ore, process to lithium carbonate, and then lithium carbonate is processed to lithium hydroxide.

However, there are ways to process the ore at the mine directly to lithium hydroxide (skipping lithium carbonate step). I’m guessing Tesla is using a supplier that does that.

Thanks for the insight!

As I said, I’ve heard they are sourcing lithium hydroxide, but I don’t know the reason it is preferred over lithium carbonate. Lithium carbonate would also not be a fire danger.

The electrolyte is probably quite flammable and therefore would be a fire hazard.

Apparently, choosing lithium hydroxide or lithium carbonate depends on the type of battery chemistry that will be produced. From Anthony’s link at the bottom of the page, naming Mexico’s Barcelona Minerals as a Tesla lithium supplier:

“Lithium deposits can produce both of the compounds lithium hydroxide and lithium carbonate. Depending on the type of battery chemistry, lithium-ion battery makers would buy one or the other to supply the key ingredient for their lithium-ion batteries. Tesla plans to buy lithium hydroxide from the mine.”

I see no reason why LG Chem can’t equal Tesla on battery price. We had an article the other day that said LG could actually be producing more kwh’s of battery. Also the chemistry is basically the same (speculation but both batts will have Ni). Also the Argonne paper claimed only small differences for going cylindrical format vs prismatic.

LG Chem uses NMC, Tesla uses NCA (for cars and 10kWh powerwall; 7kWh powerwall uses NMC).

These two are significantly different. NCA is the energy density king and will have an advantage when comparing on a kWh basis. The NMC chemistry simply can’t reach the same energy density. NMC has a slight advantage in material cost (because manganese is inexpensive) but the NCA density advantage still has to be overcome.

Ah, no… what report? Tesla will likely have 2-3x the battery production capacity of LG in 2017.

I am quite sure, that someone will announce the bulding of the Petafactory in the next 2 weeks. Building that factory will be done by bricklaying robots and mobile welding bots. So the Petafactory will be online before 2017. As it is automated to a degree of 98% and driven by the solar power generated on its roof (excess storaged in-house for 24/7 production) and the mining of the lithium, aluminium and whatever is needed will be carried out by automated mining machinery (all electric of course…) the price of Li-Ion batteries will be:

exactly 99.99$/kWh on the day 8-8-2018

pack price will be 111.11 $/kWh because it will be manufactured by robots and have a bioplastics cover.

Let’s just hope we get our cheap batteries, before the robots become self aware.

I can say I am a spam bot so I am self aware! Yieeehaa! Waiting for McFly to arrive… FluxCapacitor will rule!

Every wirelessly connected automated vehicle becomes a hackable “body” for The Singularity…

“50 kWh packs for $12,500 for well over 150 miles of EPA range.”

50kwh should get 200 miles with a small aerodynamic car. The very large Model S got 208 miles with 60kwh

Who is The SAE? Yes, I know what the letters stand for; but you should know, The SAE is strongly influenced by General Motors. In fact some call The SAE General Motors by another name. What you see here is a GM biased study…take it for what’s worth.

Its interesting they didn’t project Tesla’s future prices from the GF.

In other news, Tesla named one of its lithium suppliers – a mine in Mexico owned by Barcelona Minerals. Sadly, I put my money on Western Lithium in the stock market, not Barcelona Minerals. The bright spot is that it might not be an exclusive deal – Tesla may need more than one company to supply lithium.

http://fortune.com/2015/08/28/tesla-lithium-mine-mexico/