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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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The Tipping Point For Mass EV Adoption

Analysts have estimated that battery pack prices should drop to US$100/kWh so that electric vehicles have a chance to compete with cost with the internal combustion engine. Automakers and industry experts believe that the US$100/kWh milestone could be reached as early as in 2024, or even sooner—and that milestone will unleash the electric vehicle revolution.

Lithium-ion battery pack prices have declined by 87 percent from 2010 to 2019, with the volume-weighted average hitting US$156/kWh last year, according to estimates from BloombergNEF.

“By 2024, battery pack prices go below $100/kWh on a volume-weighted average basis, driven in part by the introduction of new cell chemistries and manufacturing equipment and techniques,” BNEF said in its Electric Vehicle Outlook 2020.

By 2030, battery pack prices are expected to reach US$61/kWh, BNEF has estimated, although high levels of investment will be needed to keep prices falling.

The US$100/kWh milestone has been considered as the “magic number” in the industry, Venkat Viswanathan, a battery expert at Carnegie Mellon University tells Bloomberg’s Akshat Rathi.

Many automakers are working to achieve the US$100/kWh milestone.

In March this year, GM said that its joint venture with LG Chem would drive battery cell costs below $100/kWh.

“The cells use a proprietary low cobalt chemistry and ongoing technological and manufacturing breakthroughs will drive costs even lower,” GM said.

Executives at Volkswagen told the New York Times last year that the company was paying less than $100 per kWh for batteries.

The tipping point for the EV revolution is just a few years away, Boston Consulting Group said at the start of this year.  

Wood Mackenzie sees battery pack prices dropping below the US$100 kWh milestone by 2024, thanks to economies of scale and technological improvements, and despite the coronavirus-driven crisis.

“Global recession has left a dent in the electric vehicle (EV) sector but it’s a scratch on the paintwork, not a big repair job,” said Ram Chandrasekaran, Principal Analyst, Transportation & Mobility at WoodMac.

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on September 22 2020 said:
    Save your breath. There will never be a tipping point for mass adoption of electric vehicles (EVs) even if the battery pack prices drop to a level to compete with internal combustion engines (ICEs).

    EVs are going to face an uphill battle against ICEs. And while they are bound to get a share of the global transport system, they will never prevail over ICEs. EVs’ share of the market could only decelerate slightly the demand for oil. As a result, ICEs will continue to be the dominant means of transport throughout the 21st century and far beyond.

    Still, range, charging time and price are only temporary teething problems for EVs. Technology will sooner or later resolve them. However, the real challenge facing mass adoption of EVs is the realization that oil is irreplaceable now or ever.

    And whilst EVs are benefiting from evolving technologies, ICEs are equally benefiting from the evolving motor technology. As a result, ICEs are not only getting more environmentally-friendlier but they are also able to outperform EVs in range, price, reliability and efficiency.

    Even in 70 years from now, EVs share of the global transport system won’t exceed 4%-5%.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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