According to a new report from Pike Research, the installed cost of lithium-ion batteries is anticipated to decrease by more than one-third by the end of 2017, thanks largely to improved manufacturing efficiencies and greater access to lithium.
The company explains that lithium-ion chemistries are at the cutting edge of advancements for electric vehicle (EV) battery systems, and the evolution of these systems will determine how smoothly – and cost-effectively – automakers can shift toward electrification.
‘The market for Li-ion batteries will be driven primarily by plug-in hybrid-electric vehicles (PHEVs) and battery electric vehicles (BEVs), which require much larger battery packs than hybrids,’ says John Gartner, research director with Pike Research. ‘Battery chemistries that prioritize energy capacity over power density can satisfy both the PHEV and EV battery segments, enabling vendors to offer products to multiple vendors for multiple models.’
In terms of revenue, the market for Li-ion batteries for transportation will grow from $2 billion annually in 2011 to more than $14.6 billion by 2017, the firm forecasts. That increase will reflect a reduction in the installed price of EV batteries to $523 per kWh in 2017, making EVs cost-competitive with petroleum-powered vehicles.
Pike Research notes, however, that challenges such as ‘achieving higher energy density, better safety, and greater discharge/charge rates linger despite advances in battery technology.’