Analysis of Current and Projected Battery Manufacturing Costs for Electric, Hybrid, and Plug-in Hybrid Electric Vehicles

There have been a number of recent reports of the current and projected costs of advanced batteries for electric, hybrid, and plug-in hybrid electric vehicles (PHEVs). These studies have focused on lithium-ion batteries as the most attractive option for future deployment in these vehicles. The reported costs have varied widely. The objective of this paper is to examine the basis of these assessments, taking particular note of the varying assumptions used regarding such important factors as power-to-energy ratio, battery chemistry, production scale, rated capacity vs. useable capacity, and beginning-of-life vs. end-of-life. A high-power battery at low production volume will have a drastically different cost per kWh compared with a high-energy battery at high-volume production. Furthermore, other factors that are, or are not, included in the costs as reported, such as marketing, warranty, and profit, can have a significant impact on reported costs; the manner in which these factors are treated can account for large differences between a manufacturer’s production cost and the battery selling price.