Electric vehicles might become cheaper in the near future. That’s because the cost of batteries is going down, Utility Dive reports.
Citing a recent report by Bloomberg New Energy Finance (BNEF), advancements in battery technology have “driven down [battery] costs at rates faster than previously predicted.” Back in 2016, battery prices were at $300 per kilowatt hour (kWh), and were projected to drop to $120/kWh by 2030. However, BNEF says that battery prices might hit $100/kWh by 2024, even with “hiccups along the way.” From there, the BNEF predicts that batteries will get to $60/kWh in 2030.
Utility Dive also says that the BNEF report suspects that the global lithium-ion battery market will grow from today’s value of $20 billion to $60 billion by 2025, and almost $120 billion by 2030.
Why This Matters for Electric Vehicles and Beyond
Because the cost of batteries keeps dropping, it lowers the costs of electric vehicles, too. It also enables battery storage projects to better compete in electricity markets. “For example, the electrification of commercial vehicles, like delivery vans, is becoming increasingly attractive,” BNEF said.
Similarly, cheaper battery prices increase their attractiveness in multiple industry sectors. For example, earlier this year, Amazon ordered 100,000 electric delivery vans; international shipping company DHL is going to pilot its electric delivery vehicles in the U.S. next year.
Utility Dive says that low battery prices will continue to be “the most critical goal for mass market electric vehicles,” but it will also help in other ways. Specifically, batteries in certain vehicles applications, including commercial delivery, may spark more differentiation in battery cells based on customer demand. It could also inspire consumers to put more value in battery life cycles rather than prices, which would add another string of changes to the battery industry. Only time will tell, especially with 2020 around the corner, how the industry will continue to morph and become more accessible to the consumer market.