Electric car battery prices are going back down faster than expected (2023)(electrek.co)
electrek.co
Electric car battery prices are going back down faster than expected (2023)
https://electrek.co/2023/11/20/electric-car-battery-prices-are-going-back-down-faster/
12 comments
I'm in the US and I don't see any current manufacturer lowering their price over time. They'll either have higher margins or they'll just add more features to raise the price.
Average car price in 2002 was ~$19k.
Adjusted for inflation is ~$33k.
Average car price in 2024 is $48k.
> I'm in the US and I don't see any current manufacturer lowering their price over time.
Have you checked Tesla prices over the last 12 months?
Have you checked Tesla prices over the last 12 months?
No, but after having checked it looks like prices have dropped but also go up and down so word is still out if they keep dropping on scale or if it's just stock price shenanigans.
https://www.skills.ai/tesla-car-prices-analysis/
https://www.skills.ai/tesla-car-prices-analysis/
Watch Australia. I feel the same way about the incumbent manufacturers and their pricing and chasing the higher end market. But BYD has come and captured a huge chunk of the EV market, and that is before releasing their low cost vehicles.
They could really only do that as long as zero interest rates and relative wages permitted. Frankly I think they made luxury EVs to justify the battery costs early in the production.
The automotive industry is known for bad margins. Interest rates go up, willingness to pay for large ticket items goes down. We won’t see anything like 0 percent rates for possibly 100 years.
One interesting outcome: near shoring of production drives local labor wages up for the long, permanent term. Maybe more in India/Mexico than the US, but still significant. And better for all than the past.
The automotive industry is known for bad margins. Interest rates go up, willingness to pay for large ticket items goes down. We won’t see anything like 0 percent rates for possibly 100 years.
One interesting outcome: near shoring of production drives local labor wages up for the long, permanent term. Maybe more in India/Mexico than the US, but still significant. And better for all than the past.
That's because the U.S stops Chinese cars.
I'll give example on Brazil. Cars were ridiculous expensive lately. Then BYD came in.
There were rumors of them launching Seagul (they call Dolphin Mini here) for R$ 100k.
Renault had Kwid E-tech for R$ 142k. They had to lower TO R$ 100k. They had to cut 30% out of nowhere because of Chinese competition.
GWM and Chery is also going well here as far I know.
I'll give example on Brazil. Cars were ridiculous expensive lately. Then BYD came in.
There were rumors of them launching Seagul (they call Dolphin Mini here) for R$ 100k.
Renault had Kwid E-tech for R$ 142k. They had to lower TO R$ 100k. They had to cut 30% out of nowhere because of Chinese competition.
GWM and Chery is also going well here as far I know.
I'm curious whether the increasing popularity of SUVs is skewing the average cost upward. There appear to be numerous sedans available in the market priced between the mid-$20,000s and low $30,000s, so the average figure of $48,000 seems somewhat inflated.
That's a good point. Could also be because of EVs being much higher priced?
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US vehicle margins are in steep decline, and competition is fierce. Sorry but your comment is in opposition to reality. Any company who could do what you say, produce good cars cheaply, would be an instant hit.
I'm not disagreeing with what you're saying but your comment is the one that's not in reality. Yours is a hypothetical since it's not happening, and maybe not possible.
> For example, much of their value is in the software, which replicates for nearly zero marginal cost.
People have been saying this for decades now and conveniently forget that replacing CD cases with Internet downloads doesn't eliminate the fact that software engineering is expensive in itself.
Crazy how TurboTax isn't $5 or Tesla FSD doesn't come standard. So much for zero marginal cost.
People have been saying this for decades now and conveniently forget that replacing CD cases with Internet downloads doesn't eliminate the fact that software engineering is expensive in itself.
Crazy how TurboTax isn't $5 or Tesla FSD doesn't come standard. So much for zero marginal cost.
You forget that CDs were much more expensive than LPs even when CDs were cheaper to produce and distribute.
The music companies simply got too greedy and now their market has imploded and most people only pay for Spotify.
We might get a rerun of asian producers dominating the car market and making a panic in USA car makers.
The music companies simply got too greedy and now their market has imploded and most people only pay for Spotify.
We might get a rerun of asian producers dominating the car market and making a panic in USA car makers.
ICEs have software too, including multiple units to manage the various ICE systems that an EV doesn’t need.
Still, the cost per unit will decrease as the number of units increases, which was the point.
There isn't really a reason to expect a significant effect, in practice, Tesla COGS/unit plateaued a few 100K ago. It's a bit too abstract and high-level.
Batteries specifically does make sense, ex. Model X has 100 kWh battery. if I price out 100 kWh at $200 right now (high) and its $100 a decade from now, about $20K.
"Software" is hand-waving.
Electric motors being easier does make sense.
Batteries specifically does make sense, ex. Model X has 100 kWh battery. if I price out 100 kWh at $200 right now (high) and its $100 a decade from now, about $20K.
"Software" is hand-waving.
Electric motors being easier does make sense.
You can say the same thing about any product mass produced.
Not everything has the same unit economics. The self-driving software is one part of the costs that is heavy on the fixed costs side and will therefore scale better than other costs. If you produce a million cars vs one car, the cost to make that software isn't a million times more expensive.
Both of your examples are kind of monopolies
Is there any car software that’s “open”?
Is there any car software that’s “open”?
openpilot is an open source advanced driver assistance system that works on 250+ car models of Toyota, Hyundai, Honda, and many other brands
https://www.comma.ai/openpilot
https://www.comma.ai/openpilot
Can I run their software on Tesla?
There are examples of this, yes [0]. The phrase "run . . . on Tesla" might have different meanings. OpenPilot is not installed directly on the Tesla hardware (as far as I'm aware). OpenPilot runs on separate hardware that communicates over the car's network, typically CAN bus [1]. An analogy might be attaching USB devices to a laptop, which has its own video, sound, keyboard, and pointer; but for which a user might desire some other feedback and control method.
0. https://teslamotorsclub.com/tmc/threads/say-hello-to-an-fsd-...
1. https://en.wikipedia.org/wiki/CAN_bus
0. https://teslamotorsclub.com/tmc/threads/say-hello-to-an-fsd-...
1. https://en.wikipedia.org/wiki/CAN_bus
I'm a little afraid "economies of scale" will turn into a steering wheel one or two pedals and an ipad, no other controls.
I really hope automakers don't start embracing touchscreens even more. Tactile feedback / muscle memory is important for safer operation. At least Mazda seems to get that[1], if only others would get over their minimalism obsession. Would embrace regulations requiring physical controls for most common tasks.
[1]: https://www.motorauthority.com/news/1121372_why-mazda-is-pur...
[1]: https://www.motorauthority.com/news/1121372_why-mazda-is-pur...
I want the year 2010 car experience with some of the EV benefits. So electric motor/battery/charging/steer and break by wire/classic dials for speed/classic climate control controls/classic signalling and lighting controls/... Maybe Carplay/Android Auto, but no tracking or operating controls that are touch screens. Also, a way to disable the display with a button.
I don't think anything is brake by wire, even that Lexus has a failsafe mode that ultimately is a direct physical connection. No saving parts there yet.
I was thinking of the regenerative and used the wrong words.
One-pedal mode exists on many EVs, wherein: A person can drive around (and come to a complete stop) without ever touching the brake pedal.
If that isn't brake by wire, then what is?
If that isn't brake by wire, then what is?
My car has one pedal mode. It also has a regular brake pedal that will behave like a regular hydraulic brake, because it is.
Like the other commentor said, the brake is still connected to the brake pedal and the car mechanically assists for one-pedal mode. You can always still use the brake pedal even with any automation or assistance off.
that's assisted brakes.
<thing>-by-wire means there is a control with no physical connection to <thing>.
for example, older tesla cars can steer themselves, but the steering wheel still connects to the front wheels mechanically.
The newer cybertruck has a steer-by-wire. The wheels are turned side to side by motors, but the steering wheel is not mechanically hooked to it, it's just an electronic controller.
<thing>-by-wire means there is a control with no physical connection to <thing>.
for example, older tesla cars can steer themselves, but the steering wheel still connects to the front wheels mechanically.
The newer cybertruck has a steer-by-wire. The wheels are turned side to side by motors, but the steering wheel is not mechanically hooked to it, it's just an electronic controller.
It sounds more like brake-by-wire alongside a regular brake pedal.
The one-pedal though is only a mechanical assistance to the existing connection between the brake pedal and the brake. Maybe we're splitting hairs, but its more akin to power steering.
With [traditional] power-assisted steering, there is always a direct mechanical connection between the wheel and the steering box/rack. It's assisted, usually hydraulically, but it is not isolated by a wire; that direct mechanical connection is always there.
With [traditional] power-assisted brakes, there is always a direct connection between the pedal doing the braking and the wheel cylinders. It's assisted (usually, but not always, by vacuum), but that direct mechanical connection is always there.
With one-pedal driving that only uses exactly one pedal, there is never a direct mechanical connection between that singular pedal and the braking system. That connection is only electrical; there is no direct mechanical (or hydraulic, to split hairs) connection at all. It is entirely brake-by-wire, unless one chooses to place a foot on the brake pedal and thereby do something other than one-pedal driving.
Thus: Unless there's hydraulics connected to the accelerator pedal, then: As long as mechanical braking (pads-on-rotors friction) can be performed in one-pedal mode (and it can be), then one-pedal mode must perform braking-by-wire.
We're already there, I think; people use brake-by-wire every day. (That we also have a functional hydraulic brake pedal as a backup does not mean that brake-by-wire is not a thing that one-pedal-mode provides.)
(If that sounds aggressive, then I apologize. I'm still recovering from a vacation with a 30-hour drive, and I may be up too late, and may also be drinking a bit much tonight.)
With [traditional] power-assisted brakes, there is always a direct connection between the pedal doing the braking and the wheel cylinders. It's assisted (usually, but not always, by vacuum), but that direct mechanical connection is always there.
With one-pedal driving that only uses exactly one pedal, there is never a direct mechanical connection between that singular pedal and the braking system. That connection is only electrical; there is no direct mechanical (or hydraulic, to split hairs) connection at all. It is entirely brake-by-wire, unless one chooses to place a foot on the brake pedal and thereby do something other than one-pedal driving.
Thus: Unless there's hydraulics connected to the accelerator pedal, then: As long as mechanical braking (pads-on-rotors friction) can be performed in one-pedal mode (and it can be), then one-pedal mode must perform braking-by-wire.
We're already there, I think; people use brake-by-wire every day. (That we also have a functional hydraulic brake pedal as a backup does not mean that brake-by-wire is not a thing that one-pedal-mode provides.)
(If that sounds aggressive, then I apologize. I'm still recovering from a vacation with a 30-hour drive, and I may be up too late, and may also be drinking a bit much tonight.)
You skipped the complex heat pump system needed to regulate battery pack temperatures (and used for cabin temps as well).
BMW i4,i5,i7,iX built in mid to late 2023 use an outsourced system that widely failed in cold temps. Tesla has a famously ingenious simpler but efficient custom in house design.
BMW i4,i5,i7,iX built in mid to late 2023 use an outsourced system that widely failed in cold temps. Tesla has a famously ingenious simpler but efficient custom in house design.
This kind of comment is perplexing to me. I'm always really confused why people try to claim heat pumps are complicated because they're not really (especially compared to many of the systems in ICE cars). Most cars have even already contained a heat pump for many decades (an air conditioner is exactly the same, just moving heat the opposite direction. It literally takes one extra valve to make it bi-directional).
There are videos of hobbyists making heat pumps from compressors salvaged out of fridges or ice makers, and other scrounged parts, maybe an Arduino controlling it! They're amazingly simple when you see what they're made up of.
Sure, it sounds like there were problems with this system used in BMWs, but that's likely just a design issue. Pumping a coolant around a battery and then through a heat exchanger (that is part of the heat pump) is not that difficult compared to the cooling of an extremely complex internal combustion engine!
There are videos of hobbyists making heat pumps from compressors salvaged out of fridges or ice makers, and other scrounged parts, maybe an Arduino controlling it! They're amazingly simple when you see what they're made up of.
Sure, it sounds like there were problems with this system used in BMWs, but that's likely just a design issue. Pumping a coolant around a battery and then through a heat exchanger (that is part of the heat pump) is not that difficult compared to the cooling of an extremely complex internal combustion engine!
The complexity and ingenuity in the Tesla heat pump system is the octovalve, not the heat pump. 8 different places to source/sink heat, with different set points. Keep the battery, motor, interior each at different optimal temperatures with a single heat pump.
Yep. the non octovalve complex of separate valves and tubes between is where the BMW outsourced design failed.
Right: it’s not conceptually complex and Tesla, as i mentioned, shows such.
The parent comment to which i replied was listing significant systems in an EV, and hadn’t mentioned thermal regulation.
BMW’s outsourced Vitesco (part of Continental Power Trains originally) design differs in engineering (materials, components integration), with more disjoint components and more components therefore needing interconnections, and had cars (service bulletins applied to thousands) across Finland, Germany, Canada, US, UK, failing and leaking in a juncture not present on the Tesla design. (“Ask me how I know…twice.”)
The parent comment to which i replied was listing significant systems in an EV, and hadn’t mentioned thermal regulation.
BMW’s outsourced Vitesco (part of Continental Power Trains originally) design differs in engineering (materials, components integration), with more disjoint components and more components therefore needing interconnections, and had cars (service bulletins applied to thousands) across Finland, Germany, Canada, US, UK, failing and leaking in a juncture not present on the Tesla design. (“Ask me how I know…twice.”)
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This year is looking pretty interesting for batteries. We have the Li-on potentially dropping to $100 a KWH, that will probably also mean LifePO4 will probably come down to below $100, maybe $80 and then the introduction of Sodium Ion this year which is meant to get down to $40 a KWH.
So far Sodium Ion isn't delivering on that price drop, while the cars are all cheap but not yet really available the actual cells for sale on aliexpress and alibaba are all a lot more expensive than LifePO4 at the moment. The 13450 cells at 10Ah instead of the 15Ah for LifePO4 and at the moment are also 5x the price. Its just gouged early pricing currently but it should bring the price of home storage and car batteries down less than half of Li-on and LifePO4 but with a lower density.
Interesting year for batteries and EVs, lots of EVs cheaper than ICE vehicles coming out this year as a result.
So far Sodium Ion isn't delivering on that price drop, while the cars are all cheap but not yet really available the actual cells for sale on aliexpress and alibaba are all a lot more expensive than LifePO4 at the moment. The 13450 cells at 10Ah instead of the 15Ah for LifePO4 and at the moment are also 5x the price. Its just gouged early pricing currently but it should bring the price of home storage and car batteries down less than half of Li-on and LifePO4 but with a lower density.
Interesting year for batteries and EVs, lots of EVs cheaper than ICE vehicles coming out this year as a result.
Has anyone projected levelized cost of energy (renewables & storage) with these assumptions around storage costs plugged in?
I'm sure _someone_ has, there's a lot of people and spreadsheets out there. :)
Goldman Sachs report from November 1, 2023 that this is based off of: https://www.goldmansachs.com/intelligence/pages/electric-veh...
Here's a February 29, 2024 article from Goldman Sachs on the same topic: https://www.goldmansachs.com/intelligence/pages/even-as-ev-s...
Here's a February 29, 2024 article from Goldman Sachs on the same topic: https://www.goldmansachs.com/intelligence/pages/even-as-ev-s...
What’s never explained here is the why. Is the market for the raw materials cheaper because there is a decrease in demand or an increase in supply of raw materials in the market?
Articles that hand wave it as “due to inflation” are a bit frustrating.
Articles that hand wave it as “due to inflation” are a bit frustrating.
Initially raw materials were anticipated to be hard to come by, competive forward contracts put up prices as "shortages were forecast" and mining companies went hell for leather to open new lithium (and other elements required) prospects ...
Recently (last six months) it has become clear that more raw prospects were opened than actual demand existed for (glut of future supply), as a result a number of 'fresh' lithium mines have been recently shuttered.
In the post mining concentrate processing game ground has been broken on several processing plants that take mined concentrates and produce usuable raw minerals - Tesla in Texas, for example, now has a pipelined spodumene processing plant and adjoining battery manufacturing facility that will soon be completed.
Much of this flux from expensive to cheaper comes about from the interplay of forward contracts - it takes 18 months and more to bring new mines to production, to bring processing plants to completion, etc.
What's behind the drastic downturn in nickel and lithium prices, and what does it mean?
https://www.abc.net.au/news/2024-01-26/examining-the-drastic...
Recently (last six months) it has become clear that more raw prospects were opened than actual demand existed for (glut of future supply), as a result a number of 'fresh' lithium mines have been recently shuttered.
In the post mining concentrate processing game ground has been broken on several processing plants that take mined concentrates and produce usuable raw minerals - Tesla in Texas, for example, now has a pipelined spodumene processing plant and adjoining battery manufacturing facility that will soon be completed.
Much of this flux from expensive to cheaper comes about from the interplay of forward contracts - it takes 18 months and more to bring new mines to production, to bring processing plants to completion, etc.
What's behind the drastic downturn in nickel and lithium prices, and what does it mean?
https://www.abc.net.au/news/2024-01-26/examining-the-drastic...
Because that question is more of an economics research paper or policy brief than a mass media article. And in that arena data are currency, ie largely not public.
Generally, there’s a lot of economics principles at play. Economies of scale mean as more is produced, often, still further increases in production are possible more cheaply than previously obtained. First semi chip produced might cost billions. The billionth chip might be pennies. There’s also a concept in the environmental economics that pulling finite resources out of the ground responds to increasing demand similar to pulling more money out of a bank via loans. Ie the most easy to obtain resources are mined first and the cost increases from there. In practice, too, producer relationships matter. A company buying batteries for EVs (ie at that scale) for their 5th year in a row is going to have demonstrated to their suppliers that, indeed, they can write a check for all the materials they’ve ordered much more than in year 0. So their suppliers have better information about how reliable their needs are, and so on.
Lots of complicated things not generally in the public knowledge nor easy to explain quick enough to not get scooped by another organization.
Generally, there’s a lot of economics principles at play. Economies of scale mean as more is produced, often, still further increases in production are possible more cheaply than previously obtained. First semi chip produced might cost billions. The billionth chip might be pennies. There’s also a concept in the environmental economics that pulling finite resources out of the ground responds to increasing demand similar to pulling more money out of a bank via loans. Ie the most easy to obtain resources are mined first and the cost increases from there. In practice, too, producer relationships matter. A company buying batteries for EVs (ie at that scale) for their 5th year in a row is going to have demonstrated to their suppliers that, indeed, they can write a check for all the materials they’ve ordered much more than in year 0. So their suppliers have better information about how reliable their needs are, and so on.
Lots of complicated things not generally in the public knowledge nor easy to explain quick enough to not get scooped by another organization.
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I mean, there clearly isn’t a decrease in demand; electric car sales globally continue to increase. LFP batteries getting more common might be one factor; they have lower materials cost than conventional lithium ion batteries.
I think there's been a big scaleup of capacity that's coming on-line exactly as BEVs are declining in popularity.
Correction: There is a big scaleup of capacity that's coming online exactly as BEVs are growing in popularity slower than many previous forecasts (hence lots of press about some carmakers having to scale back BEV production, while still moving more BEVs than last year). That is a US-centric statement. BEV demand is still quite explosive in China and Europe.
https://www.energy.gov/eere/vehicles/articles/fotw-1329-febr...
https://www.energy.gov/eere/vehicles/articles/fotw-1329-febr...
> BEVs are growing in popularity slower than many previous forecasts
I've spent a fair amount of time looking for such a forecast that was actually more aggressive than the real popularity.
Your own link only shows a rather big increase in EV sales in the US, not a decrease, and it doesn't show any missed forecasts.
There was definitely a flurry of bad mass media articles about how the traditional car makers were scaling back their plans. But the facts in these articles were either extremely stilted and biased, or the facts in the articles directly contradicted the headlines.
For whatever reason, the car majors decided they wanted to tamp down on EVs in the media, and editors came through in spades with deceptive articles.
I've spent a fair amount of time looking for such a forecast that was actually more aggressive than the real popularity.
Your own link only shows a rather big increase in EV sales in the US, not a decrease, and it doesn't show any missed forecasts.
There was definitely a flurry of bad mass media articles about how the traditional car makers were scaling back their plans. But the facts in these articles were either extremely stilted and biased, or the facts in the articles directly contradicted the headlines.
For whatever reason, the car majors decided they wanted to tamp down on EVs in the media, and editors came through in spades with deceptive articles.
As soon as that happens we will start to see the road tax somehow added on to our daily driving cost and the savings made by using electricity will be greatly reduced due to this tax making EV's just marginally better for cost. But we need to pave the roads somehow so I do expect this to happen and am okay with it.
Marginal improvement? The gas tax is my state is relatively high at $.50/gal. If I have to pay that back directly to the state we’re still looking at like $12 vs $70 to charge a battery vs fill a gas tank. On top of that take away most of the engine maintenance costs and you’re coming out way ahead.
I tried pointing this out in an ev thread and got downvoted. The expense of driving is really maintaining the roads. Sounds like you’ve actually looked at the price components of gas and understand why they’re so outrageous.
My personal prediction is all those carbon taxes on gas transfer over to evs and get renamed to something else.
My personal prediction is all those carbon taxes on gas transfer over to evs and get renamed to something else.
Electric cars already pay more in taxes and fees in 36 states than gasoline cars do.
https://www.atlasevhub.com/data_story/ev-drivers-in-36-state...
https://www.atlasevhub.com/data_story/ev-drivers-in-36-state...
https://thedriven.io/2024/01/25/worlds-largest-ev-battery-ma...
"The CnEVPost article says the average price of square LFP battery cells in mid 2023 was around RMB 800 to RMB 900 per kWh. This means the price of an average 60 kWh battery pack will have dropped from $US6,776.00 to just $3,388.00 in just 12 months, saving EV manufacturers over $3,000 per vehicle."
"The CnEVPost article says the average price of square LFP battery cells in mid 2023 was around RMB 800 to RMB 900 per kWh. This means the price of an average 60 kWh battery pack will have dropped from $US6,776.00 to just $3,388.00 in just 12 months, saving EV manufacturers over $3,000 per vehicle."
So will car manufacturers lower the price of electric cars or will they just pocket the difference?
Markets open to competition from BYD will see massive price drops.
Or governments will impose more import taxes to counter Chinese government sponsored price dumping.
Fingers crossed, we might just see more affordable EVs hitting the streets soon!
Someone will grab the low end, currently served by cheap ICE cars and the second hand market. Premium and prestige brands will of course continue to charge premium and prestige prices, because that is their market.
there's enough competition in the EV sector for margins to remain fairly low. o saw a chart once. Tesla is the only one with big margins, i remember.
Margins aren't just low, many times they're negative! Rivian is losing something like 30% of the sales price each car. Tesla's margins used to be some of the best in the entire auto industry at like 25%, but are slimming down to 17% now.
This is mostly talking about estimates, most of that drop hasn't happened yet.
But most of the drop is in 2024, so is fairly firm.
Don't worry, prices will be back up soon enough:
https://news.ycombinator.com/item?id=39705926
https://news.ycombinator.com/item?id=39705926
Manufacturers continuing to use low cost imported parts instead of high cost US manufactured parts will cause prices to increase?
I mean, I would also love to see a server rack battery at $99 per kwh, but of a different chemistry, LiFePO4, I wouldn't trust having any other type of lithium battery at home.
(2023)
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EVs are complex, but in ways that are much more subject to economies of scale.
For example, much of their value is in the software, which replicates for nearly zero marginal cost. Electric motor assembly is highly automatable and a fraction of the cost of assembling engines. There are no emission control systems, fuel systems, exhaust systems.
That leaves battery materials and construction, and these are dropping fast. Goldman Sachs just predicted pack-level prices will be below $100 KWh by 2025 and continue dropping by 11% per year throughout the decade.
In fact, BYD already sells a perfectly-reasonable EV in China for around $11,000 US equivalent.
There will, of course, always be premium priced EVs in the market, but I believe the lower bound of the market will be much lower than the Corollas, Tercels and Honda Fits of today.