Early demand for electric vehicles has fallen short of optimistic projections, in large part because of the high costs of lithium-ion (Li-ion) batteries. Corporations throughout the value chain have invested heavily in the space, and now must focus on strategies for cost reduction beyond simply relying on scale. Here, we take a close look at the cost structure of Li-ion batteries, and consider the innovations that could drive disruptive decreases in cost necessary to spur growth of the the electric vehicle market. Cathode improvements, along with increases to the state-of-charge (SOC) window and reductions in capacity fade, are the surest route to cost decreases. However, in the most likely scenario, nominal pack cost will fall to $397/kWh in 2020, short of the ambitious goals needed to drive mass adoption.