Skip to Content

Half-Price Electric Vehicle Batteries

Even without technical breakthroughs, costs for batteries could drop substantially by 2020.
January 12, 2010

Electric vehicles may line the long Electric Avenue at the North American International Auto Show in Detroit this week, but you’re unlikely to see any in your neighborhood–few companies sell them, and fewer still make cars you can drive at highway speeds.

That’s going to start changing in the next couple of years as major automakers roll out electric vehicles and plug-in hybrids (that can commute in all-electric mode, using a gas engine to power longer trips). But because of the high cost of batteries, these cars will be pricey, likely costing several thousand dollars more than comparable gas powered vehicles or requiring separate battery leases on top of the cost of the car.

Because the automotive battery industry is just getting started, there’s also a lot of room for cutting battery costs by improving manufacturing and simplifying designs, according to the international consulting firm PRTM. Based on a two-year survey of battery and auto manufacturers and suppliers, it estimates that by 2020, the cost of batteries will drop 50 percent, even without technical breakthroughs in the batteries themselves. For example, while battery packs are now custom-designed for new electric vehicles, modular designs that can be easily adapted for different models could lead to higher volumes and lower costs says Oliver Hazimeh, the head of the global e-Mobility Practice at PRTM. Manufacturers will also set up manufacturing plants closer to customers, to save on shipping costs. Breakthroughs in materials and other technological advances could bring down costs even more.

With such a drop in battery costs, electric vehicles would be just as affordable as gas-powered cars, if you include the fact that electric cars cost less to operate–recharging them costs a lot less than filling up a gas tank, Hazimeh says. One manufacturer, Tesla Motors, claims you can go 250 miles on $5 of electricity. Going that far on gasoline, in a car that gets 30 mpg, would cost about four times that much.

But here’s the trick–most people don’t calculate how much a vehicle will cost to operate. Convincing them that electric cars are a good deal will require educating consumers, and perhaps inventing some creative financing, Hazimeh says.

Still, it’s going to take some time for electric vehicles and plug-in hybrids to catch on. PRTM estimates that by 2020, these cars will only account for 10 percent of new vehicle sales, an estimate that assumes they will catch on faster than hybrid vehicles have.

Keep Reading

Most Popular

computation concept
computation concept

How AI is reinventing what computers are

Three key ways artificial intelligence is changing what it means to compute.

still from Embodied Intelligence video
still from Embodied Intelligence video

These weird virtual creatures evolve their bodies to solve problems

They show how intelligence and body plans are closely linked—and could unlock AI for robots.

seeing is believing concept
seeing is believing concept

Our brains exist in a state of “controlled hallucination”

Three new books lay bare the weirdness of how our brains process the world around us.

We reviewed three at-home covid tests. The results were mixed.

Over-the-counter coronavirus tests are finally available in the US. Some are more accurate and easier to use than others.

Stay connected

Illustration by Rose WongIllustration by Rose Wong

Get the latest updates from
MIT Technology Review

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

Explore more newsletters

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at customer-service@technologyreview.com with a list of newsletters you’d like to receive.