Gavin Shoebridge – an electric vehicle nut, a keen environmentalist

                Electric Car Conversion Blog By Gavin Shoebridge

October 20th, 2011 at 12:24 am

Price of electric vehicle batteries to fall as manufacturing capacity outstrips demand

Lithium Battery Prices for Electric Cars Are Heading South

Lithium Battery Prices for Electric Cars Are Heading South

Lithium-ion battery makers have made ambitious investments in new capacity, well ahead of automakers’ commitments to large-scale production of electric vehicles

London and New York, 14 September, 2011 – The total worldwide manufacturing capacity of lithium-ion batteries for electric vehicles will greatly exceed supply unless demand by automakers increases significantly in the short-term, according to new research by Bloomberg New Energy Finance. As a result of the overcapacity, battery prices are poised to fall.

Automakers have committed to producing up to 839,000 plug-in electric vehicles worldwide by 2013, up from just 124,000 to be delivered by the end of 2011. As a result, demand for lithium-ion batteries will reach 18GWh by 2013 from the current level of 2.4GWh – a sevenfold increase in just two years. In contrast, the supply capacity under construction by battery makers will reach 35GWh by 2013, enough to supply almost double the number of planned electric vehicles. As batteries have a limited shelf life, it is unlikely that battery manufacturers will produce more than market demand. Instead, they will reduce output to match contracted demand.

At the moment, electric vehicle batteries cost between $800-1000/kWh and make up about 30-50% of the cost of a typical EV. But the short-term overcapacity and the competitiveness in the field will push battery prices lower, improving affordability of electric vehicles – but also making life increasingly difficult for smaller pure-play EV battery manufacturers, according to Ali Izadi-Najafabadi, an energy-smart technologies analyst at Bloomberg New Energy Finance.

“In the short term the larger, mainly Asian, conglomerates can cope with limited demand and compete by lowering prices, but smaller pure-play battery makers will be left vying for an increasingly limited number of supply contracts. For the latter group, other applications such as grid-scale energy storage will be a critical source of demand,” said Izadi-Najafabadi.

Automakers with committed electric vehicle plans have secured sufficient supply for their programmes through close collaboration with just five lithium-ion battery manufacturers via commercial-scale supply contracts or joint ventures. However, there are currently over 20 battery makers with plants constructed or under construction, and it will take time for this excess capacity to be absorbed. In the long term, lithium-ion battery prices will continue to decline as the industry reaches scale. Electric vehicle sales are expected to increase and battery costs will continue to decline along an experience curve to hit around $350/kWh by 2020.

Bloomberg New Energy Finance publishes detailed analyses of battery demand and supply as part of its Energy Smart Technologies Insight Service.

Tags: , , , ,
  • Callum Burnett
    4:28 am on October 20th, 2011 1

    Are 18650 batteries not already €200 euros a kilowatt hour when bought in bulk?
    Martin Eberhard was claiming that this spring when he left VW.

  • Crazy Al
    7:49 am on October 27th, 2011 2

    I\’m excited about Lithium Batteries falling in price. I\’m looking to put Lithium Iron Phosphate (LiFePO4) to power my Electric Go Kart and I\’m looking to use them for my Electric Car Conversion.

    I\’ve cruised around in a few Electric Cars with LiFePO4 batteries and they were 4 seater Electric Cars.

  • dilaver Akkaya
    10:17 am on March 11th, 2013 3

    Hello sirs,
    We are trying to convert the 2nd hand cars to electric cars. So we are trying to find all of good equipment like battery, motor etc..

    Pls awaiting your best offer about this.

    Best Regards.


RSS feed for comments on this post | TrackBack URI