Lux Research Forecasts $172/kWh For Li-Ion Batteries In 2025

JUN 21 2015 BY MARK KANE 27

Tesla Gigafactory

Tesla Gigafactory

The latest battery report “Crossing the Line: Li-ion Battery Cost Reduction and Its Effect on Vehicles and Stationary Storage,” released by Lux Research, indicates upcoming cost reductions for lithium-ion battery packs.

They expect that in 10 years from now, costs will fall to just $172/kWh.

But not all manufacturers will benefit from such low prices, according to the Lux Research’s new model. Nissan-AESC, BYD and General Motors-LG Chem still will be above $200/kWh. Only Panasonic-Tesla breaks into $200 to $172/kWh in the forecast.

“The electric vehicle opportunity is set to expand, as leading battery developers like Panasonic drive down prices of lithium-ion (Li-ion) battery packs by 35% to $172/kWh in 2025, according to Lux Research. However, only the best-in-class players will achieve that cost threshold, while others lag at $229/kWh.

The estimate is based on a new bottom-up cost model built by Lux Research in an industry known for being highly secretive about its costs. The model accounts for differences in battery chemistry, form factor, production scale, location and other nuances.”

Here are a few key findings provided by Lux Research:

  • Competitive gap is widening. Technological innovation and scale are helping leaders like Panasonic, in partnership with Tesla, widen their competitive advantage. While Panasonic-Tesla and China’s BYD will achieve $172/kWh and $211/kWh at the pack levels, respectively, the Nissan-AESC partnership risks falling behind at $261/kWh unless it changes technologies and production strategies.
  • Disruptive Li-rich NMC will deliver more gains. In 2025, a disruptive Li-rich NMC would bring in cost gains of $17/kWh over conventional NMC/graphite cells. While scale-up efficiencies like Tesla’s “Gigafactory” remain a key strategy, geographical location and technology like high-voltage cathodes are also key factors.
  • Some benefits will reach stationary storage market, too. Li-ion cost reduction will positively impact the stationary storage market as well. However, it will not address added costs like the power conditioning system, land, construction and integration. Therefore, installed stationary systems spanning from residential to grid-scale will range from $655/kWh to $498/kWh in 2025, respectively.

Cosmin Laslau, Lux Research Senior Analyst and lead author of the report said:

“High battery prices have led to some huge missed opportunities in the electric vehicle market. Now if developers can drive down prices to $200/kWh or less at the pack level, they have a chance of selling millions of EVs by the mid- to late-2020s, and reap great revenues.”

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27 Comments on "Lux Research Forecasts $172/kWh For Li-Ion Batteries In 2025"

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Lou Grinzo
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Lou Grinzo

The problem with such projections is that they lead people to ignore the possibility of surprises. If you want to project to 2020, then you’re probably OK just looking at technologies already in production or planned, essentially extrapolating existing or fairly obvious trends. But looking forward 10 years is dicier, especially with the enormous financial gain to be had from making the BBB (Big Battery Breakthrough). With all the corporations, universities, and governments chasing that prize, I certainly wouldn’t feel comfortable betting against someone finding a way to make dramatically cheaper batteries that could go into production within 10 years.

Lustuccc
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Lustuccc

he main goal of the auto-petro cartel is to delay as much as possible the era of the electric tranportation and the death of the archaic and inefficient ICE that is killing us, the living and wreaking havoc on the climat. Many many “researches ” and “studies” always put the progresses a very irrealistic long way ahead like 2025, 2050.
Unaware people see those big titles and stay uninterrested by EVs thinking that the technology is not ready yet… And the Big-Oil-Car P.R. soft propaganda goal is reached : Go on poisoning yourselves in our ICE cars, there will be no practical alternatives for a long time…
It’s a pity to see green sites like InsideEv making no nuances whatsoever on those conditionning repeated ultra pessimistic titles.

Cwuwlaw
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Cwuwlaw

Isn’t Nissan going to the same LG batteries as GM in the next couple years? Why would it’s costs be so much higher than GM’s costs? The graph even shows Nissan with higher production, so economies of scale can’t be it.

Lensman
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Lensman

The closer anyone looks at the predictions and assumptions made by Lux Research, the worse they look. I honestly don’t see how they stay in business, publishing rubbish like this.

stimpacker
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stimpacker

Since he got his PhD and joined Lux, Cosmin has been publishing reports with a lot of assumptions that many in the industry do not agree with. That’s probably understandable given his lack of experience in the industry. Lux is a small outfit, so they put him as the senior/lead analyst.

At least he has toned down his “Tesla’s Gigafactory won’t lower cost” prediction.

Mike777
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Mike777

I think the clue is that the graph looks like a linear projection, and the market is actually going geometric.

jimjam
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jimjam

ALL THE OIL IN THE GROUND WHICH CONTROLS THE PLANET’S TEMPERATURE,AMONGST OTHER FUNCTION,IS BEING “SUCKED OUT & BURNED” INTO THE ATHMOSPHERE CAUSING A “DOUBLE WAMMY” OF PROBLEMS THAT MULTIPLY TO CAUSE A CHAIN REACTION OF NEW PROBLEMS ,& INFLICTING MORE ASAULT & DISTRESS ON THE PLANET…DON’T FORGET, OIL IS THE COOLING & HEATING SYSTEM OF OUR PLANET, IT NEED TO STAY THERE IN THE GROUND WHERE IT BELONGS IN ORDER FOR THINGS TO WORK AS THEY WERE INTENDED…..That is a fact! …..JOS M

Mike777
Guest
Mike777

Yes, we know that, you don’t have to shout, this isn’t Fox Lies.

It’s really a function of population growth and that the Fossil Fuel industry produces waste that DOES NOT CLEAR. We long surpassed the planet’s ability to absorb carbon, therefore generation after generation our carbon waste product is building up, to destroy us. Since the carbon doesn’t clear the environment, it’s building up in a Geometric Growth function.

This is our suicide watch.
See, we know.

CDAVIS
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CDAVIS

A 15 year out prediction of battery $/kWh and prevailing chemistry is likely to be as accurate as where 15 years ago the analyst predicted we would be today.

Jouni Valkonen
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Jouni Valkonen

This research is odd considering that Tesla already sells PowerPacks at $250 per kWh, including electronics, cooling, packaging, integration and profits for both Tesla and Panasonic.

Therefore it is likely that the cost of battery cells is already close to $172 per kWh.

Mike I
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Mike I

It’s not odd. It says the costs are at the pack level, not the cell level.

Chris O
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Chris O

Actually Tesla charges $3500 for a 10 KWh power pack, so that would be $350/KWh retail.

przemo_li
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przemo_li

Actually, report stated full price like land, instalement, etc.

So its 350 + whatever Your solar company will demand.

RS
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RS

The 10 kWh packs are called power walls, the power packs are 100kwh+ and are sold for 250$ the kwh. The planned margin, after the GF is online mid 2016, should be around 20%-30%, so the cost of the 100+ power packs should be 200$+/- 20$. The car pacs could be a bit more, but not by a lot.

Chris O
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Chris O

In the past reports like invariably completely missed the mark, prices dropping far faster than predicted.

I suspect though that all we ever get to see are the public part of the report written not to upset the vested interests that have to pay the big bucks to get the real info.

Mike777
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Mike777

Because “geometric growth is geometric”. The growth feeds on itself. Like in the solar industry, solar panels have gotten more efficient, but also solar installation that used to take 2 days, now takes 4 hours. The same crew can now install 4 homes in 2 days, instead of 1.

We are at a great time in history to watch this progress.

ffbj
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ffbj

Yes, well, take that with a grain of salt.
For instance lets just tale a short little jaunt in the way back machine to say March 27 2012, and we see this headline:

Lux Research forecasts Li-ion EV battery pack costs to decrease to $397/kWh in 2020
27 March 2012

A glance at the calendar says it is June 2015 undercutting their predicted cost by 5 years, and $100. Now that’s what I call an accurate prediction, Not!
So now they have the temerity to announce another questionable prediction even further out when their former prediction was so blatantly wrong.
In regards to predicting prices of batteries in the future Lux has been abysmal. My prediction is they will continue to be so.

Djoni
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Djoni

I’ll bet on your prediction, since they’re based on historic faulty prediction, it’s a good guess they’ll remain that way.

Rob
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Rob

It will happen much sooner if all-electron battery works… We should know by the end of this summer.

Lensman
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Lensman

Any prediction regarding tech advances more than 5 years out, in a field changing as rapidly as rechargeable battery chemistry, is pretty much without any value at all. The only thing we can expect is that the unexpected will happen as battery tech continues to advance.

Furthermore, Lux Research has an especially bad record with attempting to predict the near future of the EV revolution. Their predictions are more amusing than informative.

Zim
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Zim

Hey Lensman, specifically, what rapid changes have there been lately in the chemistry of rechargeable batteries?

mr. M
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mr. M

the introduction of Lithium-polymer batteries.

przemo_li
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przemo_li

It is something if people claim that industry of li-* batteries as “fast moving” or “fast changing” 😀 😀 😀

I have no trouble with that. But guys, just testing if battery pack do not deteriorate overly/quickly during warranty period, takes multiple years.

Any breakthrough today (battery pack ready to manufacture), would wait few years and then some more as fabs would need to be retooled.

No quick free upgrade for batteries.

Incremental improvement to manufacturing/organization/sourcing of base materials, is causing those lowering!

Lensman
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Lensman

przemo_li said:

“It is something if people claim that industry of li-* batteries as ‘fast moving’ or ‘fast changing’ 😀 😀 😀 ”

I don’t know why you find that amusing. Compared to virtually every industry except electronics, advancements in secondary batteries have been quite rapid over the past 30-35 years.

You might notice that gasoline and diesel haven’t advanced much, or even at all, in a century or more. 😀

Get Real
Guest
Get Real

LUX Research and Cosmin Laslau are a joke as their former piss poor guesses show, http://insideevs.com/lux-research-tesla-gigafactory-cut-ev-cost-2800-create-massive-overcapacity-tesla-misses-500000-unit-sales-target/.

It is obvious that battery cell and pack costs are and have been declining and that rate of cost decline is increasing. Once the Tesla Giga Factory ramps up the rate will start to decline even faster.

And all this is being accomplishes soley through increased manufacturing and materials efficiencies without any technological breakthroughs which are sure to happen.

OB1
Guest
OB1

Jb Straubel seems to believe that battery prices might drop to 100/kWh by the end of this decade.

electric-car-insider.com
Guest

A123 Systems spin-off 24M just announced yesterday a new manufacturing process they say reduces facility cost by 90%. They expect $100 kWh by 2020. Considering their pedigree, it’s no idle boast.

The other path to sub-$100 kWh is doubling, tripling, quadrupling energy density. There appear to be several productive pathways to that goal.