Battery prices are falling and fuel prices are rising. There could come a point in the not-so-distant future, where it would finally be more prudent economically to drive an electric vehicle rather than a petrol or diesel one.
So, how fast are battery prices, specifically the prices of lithium-ion batteries used in electric vehicles, falling? This would bring down the overall price of electric vehicles as well because batteries account for close to 40-50 percent of the cost of the vehicle.
A report by Bloomberg New Energy Finance (BNEF) in December 2018 puts a timeline to the price drop. This report has become a benchmark for the EV industry.
Where Are Battery Prices Heading?
The BNEF report has been tracking lithium-ion battery prices since 2010 and shows that average weighted prices of battery packs have dropped about 85 percent between 2010 to 2018. Prices have dropped from an average of $1,160 per kWh in 2010 to $176 per kWh.
The report says that prices are likely to fall to $94 per kWh by 2024, which is when battery prices would drop a further 50 percent.
That’s one end of the spectrum. On the other hand, there are even more optimistic predictions from companies like Envision Energy, an energy company, says battery prices would drop to less than $50 per kWh by 2025.
As battery prices drop further the production of EVs would become even more mainstream. Meanwhile oil prices, which are predicted to hover around $82 per barrel of crude by 2025 from the $65 this year, are pegged to touch $92 a barrel on average in 2030. That would result in a direct increase in petrol and diesel prices and hence a sharp increase in running costs for owners.
Life of EV Batteries
Another concern that electric vehicle buyers have is the life of electric vehicle batteries. Many are of the impression that EV batteries deteriorate quickly and would be unusable in a few years.
However, that’s not true. Most EV batteries, and lithium-ion batteries especially as compared to Ni-MH or Ni-CD batteries, do not lose their entire capacity as they age. Reports have shown that Li-ion batteries lose about 25-30 percent of their total capacity in about 300,000 Km of driving. That’s more than the average driver ever manages with a car.
Also if a battery is rated for 1,000 or 1,500 charge cycles, this means the fully discharge to fully charged cycle. If they are charged partially or only partially discharged, the number of charge cycles increases.
Globally, for instance, MG offers a warranty for 7 years on its EV batteries. While we wait to see what kind of warranty MG offers in the Indian market, it just goes on to that companies are confident about the lifespans of their batteries. MG Motor India has partnered with Exicom TeleSystems for second-life use of electric vehicle batteries from its upcoming SUV the ZS EV.
Exicom will re-deploy MG ZS EV batteries at the end of their useful life with the car and put them through a controlled process of evaluation, disassembly, and repackaging to design custom battery packs for non-automotive applications.
What Happens to Old batteries?
Unlike fossil-fuel burning internal-combustion engine cars, electric vehicle batteries have an afterlife beyond the vehicle. There are two things that can happen with EV batteries.
One, they can be recycled. Lithium is commonly misconceived as being a rare-earth element, but that’s not true. Instead, its occurrence geographically is limited. However, lithium does not get consumed in the electricity generating process in an EV battery. It can be recovered and re-used for making new batteries.
Two, the batteries can be repurposed. While batteries that have done duty in a car for a considerable amount of time may not have the full range expected of the vehicle, they can be used for many stationary applications. Old EV batteries can be used as inverters or power-backup systems for residential or industrial applications. They could also be combined with solar fields as temporary energy storage devices.
Powered by MG Motor India. To know more about the MG ZS EV, click here.
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