Analysts are predicting a bright future for battery costs, thanks in large part to Tesla’s under-construction Gigafactory in Nevada:
Tesla’s grid battery, the Powerwall, is currently priced at about $250/kWh, but CTO JB Strabuel said at a recent utility conference that he expects that price to drop to about $100/kWh by the end of the decade as the company ramps up production.
That ambitious estimate is now being approached by other analyst predictions.
“Our detailed battery component cost analysis details a path to 50%+ reduction in battery pack cost to $125/kWh by 2020,” [Jefferies analyst Dan] Dolov said, according to StreetInsider. Jefferies expects the battery cells themselves to reach about $88/kWh by the end of the decade, and the battery packs to reach about $38/kWh.
A 50% reduction by 2020 would be monumental for the electric vehicle industry. Imagine double the range of current all-battery vehicles at the same price tag ($30K or so for the LEAF, for example). Imagine a high-end Tesla at $20-30K off the current price.
It’s worth keeping in mind that these predictions are only about 2020. By 2030, when we need all new vehicles to be battery-electric to meet our climate goals, prices should come down even more, while public charging infrastructure will only improve.
And as I’ve said before, it’s not just about transportation. These batteries will be needed in bulk to store surplus solar and wind power to decarbonize the grid.
Basically, if you care about climate change, these kind of price forecasts are the most important pieces of news in the field.