EV battery costs declining faster than expected

The cost to make lithium-ion battery packs used for plug-in vehicles dropped by about 14 percent a year between 2007 and 2014, according to a new study published in the journal Nature Climate Change. That means the average cost per kilowatt hour fell from about $1,000 to $410 during that time period. And "market-leading" plug-in vehicle makers have shaved that cost further to $300 per kilowatt hour.

In late 2013, Navigant Research forecast that li-on battery costs would fall to about $300 per kilowatt hour by this year (nice work!) and that those costs could fall to $180 per kilowatt hour by the end of the decade. That means that electric vehicles may be selling for just a $2,000 premium compared to a similar gas-powered car by 2020. That premium could shrink further because automakers charged with meeting stringent federal fuel economy standards will be investing more in fuel-efficiency technology, potentially boosting the cost to make conventional vehicles as plug-in vehicles costs fall because of battery-price declines. Take a look at the rather scientific Nature Climate Change report summary here.