Battery costs are declining and will eventually make EVs cheaper to buy over time.
Batteries have become an increasingly important technology for powering everything from mobile devices to electric vehicles. Over the years, the cost of batteries has dropped dramatically, making them more accessible and affordable for consumers.
We're going to provide a year-by-year cost breakdown of 1 kWh of batteries from 2000 to 2021.
2000-2005
In the early 2000s, the cost of 1 kWh of batteries was around $1,000. This made batteries prohibitively expensive for many applications, including electric vehicles. However, during this time, advancements were being made in lithium-ion battery technology, which would eventually drive down the cost of batteries.
At this time, an EV would not be possible at large scale, only for prototypes or fun. A 60 kWh battery pack, which is on the Model 3 Tesla, would have cost $60,000 at this time, making it unaffordable to anyone.
2006-2010
Between 2006 and 2010, the cost of 1 kWh of batteries dropped to around $500. This was due in part to increased production of lithium-ion batteries, which allowed for economies of scale to be achieved. Additionally, improvements in battery chemistry helped to increase the energy density of batteries, which made them more efficient and cost-effective.
A 60 kWh at this time would cost $30,000, which is a lot better than $60,000, but still isn't feasible for large scale production.
2011-2015
From 2011 to 2015, the cost of 1 kWh of batteries dropped to around $300. This was due in part to increased competition in the battery market, as more companies began investing in battery technology. Additionally, improvements in manufacturing processes helped to drive down the cost of producing batteries.
At this time, the cost per kWh was making EVs a possibility, with a 60 kWh battery pack now costing $18,000. The Tesla Model S was created during this time.
2016-2020
Between 2016 and 2020, the cost of 1 kWh of batteries dropped to around $150. This was due in part to increased demand for batteries, particularly in the electric vehicle market. Additionally, improvements in battery chemistry and manufacturing processes helped to increase the energy density of batteries and reduce production costs.
With this cost per kWh, it's no wonder the Tesla Model 3 and Model Y came into existence. The cost for a 60 kWh battery pack was now just $9,000.
2021 and Beyond
As of 2021, the cost of 1 kWh of batteries has dropped to around $100. This has been driven by increased demand for batteries, particularly in the renewable energy sector, as well as continued improvements in battery chemistry and manufacturing processes. It is expected that the cost of batteries will continue to drop in the coming years, with some experts predicting that the cost could drop to as low as $60 per kWh by 2030.
60 kWh battery packs are now about $6,000 and continuing to drop. Eventually, this will lead to mass production of small and compact EVs with lots of range.
Implications
The decreasing cost of batteries has significant implications for a variety of industries. In the automotive industry, lower battery costs have helped to make electric vehicles more accessible to consumers. In the renewable energy sector, lower battery costs have helped to increase the viability of energy storage solutions, which can help to balance the intermittency of renewable energy sources like wind and solar.
Additionally, lower battery costs have helped to make EVs, mobile devices and other electronics more affordable for consumers.
Conclusion
The cost of 1 kWh of batteries has dropped significantly over the past two decades, from around $1,000 in 2000 to around $100 in 2021.
This has been driven by a variety of factors, including increased demand, improvements in battery chemistry and manufacturing processes, and economies of scale. The decreasing cost of batteries has significant implications for a variety of industries, and it is expected that the cost of batteries will continue to drop in the coming years, making them even more accessible and affordable for consumers.
If you look at 2030 and a continued reduction of cost, we should expect $50 to $60 per kWh then and in 2040, about $10 to $20 per kWh. That means a 60 kWh battery pack would cost about $3,000 in 2030 and only $600 in 2040. Wow...
What do you think of the declining costs of batteries?
Online writer since 2008. I enjoy writing and have written nearly a thousand tech related articles about electric vehicles, software, tech companies, hardware, gaming, tech related products, and company developments in tech.
