Lithium-ion battery costs tipped to fall to $US172/kWh

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Lux Research predicts that costs for “best-in-class” players’ lithium-ion (Li-ion) battery packs will fall to US$172/kWh by 2025, not so for stationary storage.

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PV Magazine

Lux Research predicts that costs for “best-in-class” players’ lithium-ion (Li-ion) battery packs will fall to US$172/kWh by 2025. These prices will primarily benefit the electric vehicle (EV) industry, however, with the stationary storage market continuing to see significantly higher prices.

Panasonic-Tesla, can expect to see costs for their Li-ion battery packs fall by up to 35% by 2025 Tesla Read more: http://www.pv-magazine.com/news/details/beitrag/stationary-storage-costs-to-remain-high--despite-predictions-of-172-kwh-li-ion-battery-costs-_100019507/#ixzz3acri4UPA
Panasonic-Tesla, can expect to see costs for their Li-ion battery packs fall by up to 35% by 2025
Tesla

Although Li-ion battery industry leaders, including Panasonic-Tesla, can expect to see costs for their Li-ion battery packs fall by up to 35% by 2025, to $172/kWh, Lux Research warns of a widening gap between other market competitors, who can expect to see costs falling to just $229/kWh in its latest report, “Crossing the Line: Li-ion Battery Cost Reduction and Its Effect on Vehicles and Stationary Storage.”

Specifically, it states the Nissan-AESC partnership could see costs stuck at $261/kWh, “unless it changes technologies and production strategies.” China’s BYD, meanwhile, is expected to achieve $211/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,” commented Lux Research in a statement released. “The model accounts for differences in battery chemistry, form factor, production scale, location and other nuances.”

The EV industry is expected to gain most from these cost reductions, with Lux Research predicting the opportunity to sell “millions of EVs” by the mid- to late-2020s. The stationary storage market, however, will continue to see higher prices – $655/kWh to $498/kWh in 2025 for residential and grid applications, respectively – due to the added costs of these systems, like power conditioning systems, land, construction and integration.

The research company adds that in addition to scale-up efficiencies,  geographical location and technology will be key factors to driving down costs further. For instance, Li-rich NMC batteries will help to decrease costs by as much as $17/kWh over conventional NMC/graphite cells, it says.

Source: PV Magazine. Reproduced with permission.

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19 Comments
  1. Jacob 4 years ago

    Can they tell us the cost of storing electrons?

    That is the most important figure.

    • Jouni Valkonen 3 years ago

      Actually, it is not so simple because batteries have value too. It is not just costs. Therefore the net cost of batteries is extremely hairy problem to solve, but my hunch is that it could make sense in United States. Today the US grid is plagued by power outtakes and distributed batteries could help help with the stabilization of grid. Also batteries allow higher share of renewables and therefore helping to make grid electricity cheaper and cleaner.

      • Jacob 3 years ago

        How would you know if the Tesla battery is better than the LG Chem battery?

        We need independent testing of batteries.

        • Jouni Valkonen 3 years ago

          And that would take at least five years as it is difficult to simulate real world conditions. Tesla batteries are advanced because they have very sophisticated cell optimization. Therefore it is difficult to test batteries using laboratory simulations. Only time will tell which is better. Only Tesla is offering today integrated power storage solutions in reasonable price for households and companies.

          • Jacob 3 years ago

            I think the safest option would be to lease batteries.

            SolarCity sell you electrons rather than solar panels. They are going to offer an off-grid package soon for houses in Hawaii.

            $0 upfront hopefully.

  2. Bob_Wallace 4 years ago

    With Tesla currently paying $180/kWh for cells and the price expected to fall to about $130/kWh when the Gigafactory is running I’m not seeing it take until 2025 to bring their pack price down to $172/kWh.

    The Tesla pack is not much more than a battery/cell container.

    • Jacob 4 years ago

      Tesla packs contain coolant.

      • Bob_Wallace 4 years ago

        Yes. A path for coolant to be circulated. But that doesn’t sound like something that would cost much when built a scale.

        I’m not sure how coolant flows through the pack. I read something about one connector (+/-) for the batteries being a square tube which serves as both to connect the batteries and carry the coolant.

        • Jouni Valkonen 3 years ago

          I think that the profits are the biggest cost factor that adds costs to pack level cost.

    • Jouni Valkonen 3 years ago

      Today Tesla 100 kWh PowerPacks are sold at $250 per kWh. I would assume that Model S pack costs around $220 per kWh. Today it is already cheap enough as levelized cost is less than the cost of gasoline/Diesel for 500 km ranged electric car.

      I think that that 170 dollar level is reached in 2020.

    • newnodm 3 years ago

      “The Tesla pack is not much more than a battery/cell container.”

      And a sophisticated charge controllerBMS. And an active cooling system. And fire retardant gel. And a DC-DC converter. But other than that, just a container. 🙂

      • Bob_Wallace 3 years ago

        Yes, there are other components in the system in addition to the battery packs. Some of those items are the charge controller, the DC-DC converter, etc.

        However the parts that are not part of the battery packs are not included when one talks about battery pack prices.

        • newnodm 3 years ago

          Yes, if I’m buying alkaline batteries at Walgreens. There’s no Tesla battery without the things I listed. To the extent that other new batteries don’t need a sophisticated charge controller/BMS and active cooling, that is a potential disadvantage for Tesla.
          I don’t believe Tesla can profitably make the batteries they announced for several years.

          • Bob_Wallace 3 years ago

            You’re playing word games.

            The Tesla needs wheels as well as batteries to move down the road. Are the rims and tires part of the battery pack?

          • Bob_Wallace 3 years ago

            “A battery pack is a set of any number of (preferably) identical batteries or individual battery cells. They may be configured in a series, parallel or a mixture of both to deliver the desired voltage, capacity, or power density. The term battery pack is often used in reference to RC hobby toys and battery electric vehicles.

            Components of battery packs include the individual batteries or cells, and the interconnects which provide electrical conductivity between them. Rechargeable battery packs often contain a temperature sensor, which the battery charger uses to detect the end of charging. Interconnects are also found in batteries as they are the part which connects each cell, though batteries are most often only arranged in series strings.”

            http://en.wikipedia.org/wiki/Battery_pack

            Here’s how Tesla describes its home storage system, the Powerwall –

            “Powerwall consists of Tesla’s lithium-ion battery pack, liquid thermal control system and software that receives dispatch commands from a solar inverter.”

            http://www.teslamotors.com/presskit

            Notice that pack and thermal control system are separate things.

            Finally, last October Navigant Research reported that Tesla was paying Panasonic $180/kW for cells.

            https://reneweconomy.com.au/2014/battery-storage-costs-plunge-below100kwh-19365

            If you look at the pack below it’s fairly apparent that most of the pack cost has to be the cells. I’m seeing $240/kW for pack prices around the web which seems reasonable based on $180 for the cells.

            Dropping the cost of cells by 30% once the Gigafactory is in operation would bring cell price to about $130/kWh. Bringing pack costs down from (perhaps) $60 to $40 with much higher volume manufacturing and more automation doesn’t seem unreasonable.

  3. Miles Harding 4 years ago

    The idea of a cost differential between EV and stationary batteries seems a bit unlikely, maybe wishful thinking on the part of some suppliers.

    The great disruptor, Tesla, has already blown that out of the water with their scalable 100kwh battery pricing, likely to be $250/kwh.

    I can see the EV industry making different batteries for urban and extra-urban use. My observations indicate that about 100-150km is effective within cities, but more like 300km range is needed on the highway to allow for the fast charger limits (low of 20% to 80% charge in 30 minutes) and higher speeds (energy consumption), making the distance between fast charges something like 150km.
    The smaller battery is likely to be 25kwh and the larger about 50kwh.
    Maybe the options will be small battery, large battery or small + petrol range extender??

    The comment from the above is that either of these battery capacities is good for stationary domestic use. Really, it’s just necessary to box these then hang an inverter and cooler off them.

    Stationary batteries could make use of end-of-life vehicle batteries, as the stationary power and kwh capacity requirements are much lower than the EV demands

    • Jouni Valkonen 3 years ago

      What we need are affordable financing models for car batteries. So that 20 kilodollar capital cost can be levelized for the whole lifetime of battery. This makes the monthly cost of battery cheaper than the comparable cost of gasoline or Diesel.

      • Miles Harding 3 years ago

        Sounds like a leasing model.

        The end of battery life is another issue. Used EVs may be really cheap, likely regardless of battery condition. I would expect that there will be a battery replacement industry, but the cost may be impressive — more than an engine replacement is these days.

  4. nakedChimp 3 years ago

    I don’t get it.. stationary battery packs need a BMS and interface to 110/230Vac as does the car, but on top of it it will need less protection (plastic instead of metal), will be easier to cool (can stand free with simple fans blowing at it, less dense packed, usually charges slower) and can use clunkier components that are rated for less (car easily draws 50-100kW uphill/accelerating, compare to house with maybe 10kW peak load max).. not to mention environmental stress (temp ranges, vibration, etc..).

    So yeah, the case for more expensive stationary ESS vs EVbattery systems is just not there, the ESS should always be the simpler, cheaper and less ‘sophisticated’ system of the two.. anyone knows something I don’t?
    What do I miss?

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