BloombergNEF reports that electric vehicle battery cost has officially dropped under the critical $100 per kWh price point for the first time in history. This has happened in China in the production of battery packs for electric buses.
The price per kWh is an important metric to measure not only the cost of an EV battery, but also the cost of an electric vehicle.
Here is why this battery price drop is an important news. The $100 per kWh for battery packs is the price point needed for electric vehicles to be cost-competitive with gasoline-powered vehicles.
This means, after the industry reaches this price point level, making and selling electric vehicles will be more profitable than making gas cars.
This is a huge boost for companies like Tesla and other automakers who build and sell electric vehicles.
James Frith, BNEF’s head of energy storage research and lead author of the report, said: “It is a historic milestone to see pack prices of less than $100/kWh reported. Within just a few years we will see the average price in the industry pass this point. What’s more, our analysis shows that even if prices for raw materials were to return to the highs seen in 2018, it would only delay average prices reaching $100/kWh by two years – rather than completely derailing the industry. The industry is becoming increasingly resilient to changing raw material prices, with leading battery manufacturers moving up the value chain and investing in cathode production or even mines.”
Lowering the cost of the pack also allows money to be spent in other areas. It's not like Telsa's cabins are area of luxury - they are functional. Just like the Bolt's cabin was cheap because they had to put a 60kWh battery in it.
Armen Hareyan is the founder and the Editor in Chief of Torque News. He founded TorqueNews.com in 2010, which since then has been publishing expert news and analysis about the automotive industry. He can be reached at Torque News Twitter, Facebok, Linkedin and Youtube.