With the improvements in manufacturing processes, the cost of the automotive lithium-ion batteries might come down in the near future, says a study conducted by McKinsey. If the findings of the study are anything to go by, we may soon see a reduction in the prices of electric vehicles. We may also see more electric, hybrid models on the road.
The automotive lithium-ion batteries’ price is expected to drop by thousands of dollars by the end of the decade said the study. John Newman, an associate McKinsey partner in San Francisco, co-authored the report with McKinsey partner Russell Hensley in Detroit and Matt Rogers, director of McKinsey’s San Francisco office
The researchers developed a “should-cost” model. Here they suggested that the price of a lithium-ion battery pack could drop from today’s $500 to $600 per kilowatt hour to about $200 by 2020.
This would further decline to $160 by 2025. Thus it would make the EVs more accessible to many consumers.
Improved manufacturing processes will help battery plants to be more productive by 2015, said the study.
Around 25 percent of the price reduction is determined by the “lower components prices”.
Since the price of electric vehicle is directly proportional to the cost of batteries, any reduction in battery price could make the vehicles cheaper. What do you think? Will we see more EVs on the road?