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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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The Two Most Important Factors In The EV Boom

The ranks of batteries aiming to challenge the dominant lithium ion technology have been swelling rapidly in the past few years are researchers and businesses seek a better and cheaper alternative to lithium ion technology. But lithium ion battery makers have not been sitting on their hands, either. According to BloombergNEF, the energy density of lithium ion battery dells has tripled over the last ten years.

“Battery energy densities keep getting better. They’ve almost tripled at the cell level since 2010,” BloombergNEF’s Head of Advanced Transport, Colin McKerracher, said as quoted by CleanTechnica.

What this means is that the new batteries can pack more energy in the same space than did the batteries from 2010. And they have not gotten more expensive for the increased density. On the contrary, EV battery pack costs have fallen from as much as $1,100 per kWh ten years ago to just $156 per kWh last year, again according to BloombergNEF, although other sources point to an average battery cost of $175-$200 per kWh. It will take them another three years, however, to reach the $100 per kWh level—the level at which EVs would become as cheap as internal combustion engine cars.

This is a remarkable progress for a technology that used to be reserved for those of an eccentric bent and the money to afford an electric car. Yet now that governments around the world are seeing EVs as one of the cornerstones of the future renewable energy system of the world, the impact of their support is showing. Making EVs as cheap as ICE cars without—and this is the important part—compromising their performance (meaning range) is the number-one priority of carmakers that are spending billions on new electric models. Their number-two priority is accelerating charging times while keeping prices relatively low. Related: The Permian Pipeline Even Environmentalists Should Support

It is a real conundrum but developments in battery density suggest carmakers will eventually get there. However, it might take them longer than many would expect. In 2018, the EU Science Hub predicted that battery costs will halve over the ten years to 2028, not so much because of energy density advancements but rather because of the expected mass production of EVs in response to huge demand.

Unfortunately, this huge demand has yet to materialize. Last year, EV sales made up 2.5 percent of total sales, or 1 in 40 cars. This is not a whole lot against the backdrop of government ambitious about an all-electric future but it is a growing number. What’s more, the charging station network is growing globally, too, despite the slow adoption.

BloombergNEF has estimated that there are almost 1 million charging points already installed. While this is nowhere near the number of fuel stations, it is quite a network, given that you don’t need to charge your EV at a station: you can do it at home. So, that’s almost a million charging points for more than 7 million EVs, according to 2018 numbers from the International Energy Agency (5.2 million EVs) and sales of some 2.2 million EVs last year.

It seems all is going well for the EV industry, at least from the perspective of research and development, and charging infrastructure. What is not so well is that EV subsidies are being phased out in some large markets, notably the United States, and the effect of this phase-out will not be positive: it has already led to a 4-percent decline in EV sales for December 2019. Hopefully, however, it will be a temporary one and the EV industry will soon prove it can stand on its own two feet—or four wheels.

By Irina Slav for Oilprice.com

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