Searching for Innovations to Cut Li-ion Battery Costs

March 19, 2012 | State of the Market Report

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.

Coverage Areas

  • Owning the Energy Transition
  • The Future of Mobility

Table of Contents

  • Executive Summary
  • Landscape
    Lithium-ion batteries remain the only choice for plug-in vehicles, but high costs remain a significant barrier to widespread adoption, driving innovation throughout the value chain.
  • Analysis
    Our model seeks to uncover the optimal path to disruptive cost improvement.
  • Outlook
  • Endnotes

Lead Analyst

Kevin See, Ph.D.
Vice President, Research