Bolivian lithium miners
Do we really yet know?
How much does a lithium-ion battery cost? What’s the $/kWh? That’s a question the Townsend Company recently asked, and answered, to demonstrate that there are many misunderstandings regarding lithium-ion batteries, their performance and what that performance costs in the real world.
However, if you follow the automotive battery news and you’re wondering how one company’s batteries compare to another, What’s the $/kWH offers some interesting metrics to ponder.
Overall, the article seems to confirm a suspicion I’ve had for some time, we’re still relatively clueless about how much battery powered vehicles are really going to cost as we head into the future. While it’s easy to claim that such and such plug-in’s battery costs $10,000 today and will only become cheaper, that might not really be the whole truth. For example, a particular battery chemistry might offer certain capabilities for a certain cost, but it might never offer scalability. Conversely, a battery that costs $15,000 for the same range as the $10,000 battery might offer scaling capabilities that half the price of the battery or more in time.
If that reduction in costs requires a 5 – 10 year commitment. Which battery do you start with? The dead end battery with cheaper upfront costs? Or the more expensive battery that offers scalability?
Couple that with the fact that the supply chains for a significant uptick in production are non-existent today. What happens once production picks up pace? Will there be temporary supply and demand issues? Could politics in foreign countries be confounding variables in any battery forecast?
Such questions have prompted some researchers to caution that lithium battery car technologies could evolve into an ‘increasing cost industry’, where excessive demand for one critical input in production can drive prices for the entire technology higher. Essentially, increased production doesn’t guarantee a price reduction.
Interestingly, I had heard this ‘increasing cost’ speculation years ago and never really thought much of it until recently. It all came together when GM’s Jon Laukner, one of the men along with Bob Lutz responsible for the Chevy Volt, claimed that today’s battery technologies are not dependent upon volume for cost reductions. Instead, technological breakthroughs are the keys to cheaper battery-powered vehicles.
Consequently, might there be too much focus on the cheapest battery today, when more expensive batteries actually offer more long term potential? Even worse, if we’re using technologies that aren’t going to scale well today, are we producing an efficient utilization of resources? If that inefficiency isn’t going to be easy to resolve, the idea of increasing costs, despite increases in volume, begins to sound a bit alarming.