EV batteries too expensive for widespread adoption, says study

A new report has warned that the high cost of current battery technology means that electric vehicles are unlikely to be widespread by 2020.

As the first lithium-ion battery rolled off GM's high-tech production facility in the US town of Brownstown, Michigan on January 7, the Boston Consulting Group (BCG) issued a stark warning that a "major breakthrough in battery technology" was needed to push electric cars mainstream.

The study concluded that the long-term cost target used by automakers - $250 (€174) per kilowatt-hour - is unlikely to be achieved without major innovation in battery chemistry to allow better energy storage without a cost increase. Current car battery packs deliver energy at a cost of around $1000-$1200 (€692-€838) per kilowatt-hour, according to BCG, far higher than the $250-$400 (€174-€279) per kilowatt hour achieved by the smaller lithium-ion batteries widely used in consumer technology.

"For years, people have been saying that one of the keys to reducing our dependency on fossil fuels is the electrification of the vehicle fleet," said Xavier Mosquet, Detroit-based leader of BCG's global automotive practice and a co-author of the study. "The reality is, electric-car batteries are both too expensive and too technologically limited for this to happen in the foreseeable future."

BCG believes that the most likely outcome is that 26 percent of the cars sold in major developed markets in 2020 will be electric or hybrid - some 14 million vehicles. Of these, 1.5 million will be fully electric, 1.5 million will be range extenders (where a conventional engine supplements battery power) and 11 million will be hybrid vehicles.

Lithium ion batteries are widely believed to be the most likely to be implemented in electric vehicles, as they offer considerably better efficiency than the nickel-metal hydride (NiMH) batteries used today in hybrids such as the Toyota Prius. General Motors, which has started production of lithium-ion batteries for the Chevrolet Volt, intends to begin implementing them in production validation or test vehicles from spring 2010.