The battery pack in an electric car is the most expensive part of the car. Currently, it accounts for as much as 30% of the price. But EV batteries last a long time. Most are guaranteed for 8-10 years and are likely to last as long as 20 years. In practice, only 1.5% of electric cars need battery replacements for one reason or another.
The economics of EV batteries has changed dramatically over time and will continue to do so. EV battery capacity is measured in kWh, the units you are charged for your home electricity. An EV with a 300-mile driving range will have a battery pack that holds something like 75 kWh.
In 2008, when electric cars were just starting to enter the market again after earlier false starts, lithium-ion battery packs cost $1,355 per kWh. When the Tesla Model S was introduced in 2012, packs were about $800. By 2019, packs broke the $200 per kWh barrier. Last year, lithium-ion battery packs reached $115 per kWh.
A combination of technology improvements and strong market competition with growing supplies is driving prices ever lower. Industry analysts expect battery prices to drop well below $100 this year and reach about $80 next year.
The result of all of this cost reduction is that EVs will be cheaper than equivalent internal combustion vehicles, which in fact is already the case in China. Apart from cost, batteries for cars continue to improve so that the driving range of EVs will continue to increase making the cars more attractive and very practical for nearly all drivers.
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How Much Do Electric Car Batteries Cost to Replace?
Photo, posted January 22, 2019, courtesy of Steve Rainwater via Flickr.
Earth Wise is a production of WAMC Northeast Public Radio
