Lithium Ion Battery Prices Projected to Fall 70%

July 12, 2012 – The cost of lithium-ion batteries used in electric vehicles is projected to decrease more than 70% by 2025 as higher oil prices and fuel economy standards impel auto manufacturers to build more hybrids and all electric vehicles, according to a
McKinsey & Co study just released. Larger volume manufacturing would lead to one-third of the potential price reduction by 2025 according to  McKinsey.  McKinsey predicts the price of a complete lithium-ion battery pack could fall from between $500 to $600 per kilowatt hour
now to about $200 in 2020 and to $160 by 2025.  If gasoline prices stay around $3.50 per gallon or higher, automakers that purchase batteries at $250 per kilowatt hour could offer electrified vehicles that can compete with cars and trucks powered by advanced internal-combustion engines, which are now significantly cheaper.
Battery costs represent one of the main hurdles to the widespread adoption of low-emission vehicles, analysts say. The U.S. Department of Energy has set a goal to reduce the cost of a battery pack to $300 per kilowatt hour by 2014.

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