We have deepened and broadened our analysis of EVs’ disruptive potential and the implications. I had a chat about our latest thinking with transport research team leads, Prajit Ghosh and Gavin Montgomery.
Aren’t battery cost and range still EVs’ stumbling block?
Less and less so. Sure, the battery is one-third of the cost of an EV today, but costs have already fallen by 80% this decade and should continue to fall. Battery pack prices will drop below US$200/kWh this year then decline by around 10% per annum. The critical threshold is US$100/kWh – that’s when EVs will compete on commercial terms with ICE vehicles. We think we’ll get there by 2027.
What’s the future of battery technology?
Battery performance could double inside 10 years. Various lithium-ion battery (LiB) technologies are being adopted, but lithium NMC batteries are gaining the most traction. The incumbent NMC 111 chemistry is equal measures of nickel, manganese and cobalt, and has an expected energy density of around 150 Wh/kg – a sort of proxy for driving range.
The industry’s focus on increasing energy density and reducing dependency on scarce and expensive cobalt is seeing a move to NMC 5:3:2 and NMC 6:2:2 batteries. Some battery makers think they can mass-produce NMC 8:1:1 with an energy density of above 200 Wh/kg by the early 2020s, though there are big challenges with the chemical stability and controlling heat. The future is ‘next-gen’ batteries such as solid-state, with energy densities above 300 Wh/kg, which could come to the market in the late 2020s.
Is the world warming to EVs?
Slowly, but appetite will accelerate. The more obvious sign of the energy transition is the rapid, global build-out of zero-emissions renewables power generation to displace fossil fuels. This is a necessary precursor to the consumption side, where the sustainability movement, in which EVs will play a vital part, is at an earlier stage of development but now gaining momentum across a broad front.