By on May 5, 2010

AutoblogGreen‘s Sam Abuelsamid earns a tip of the blogger’s hat today for making sense of a fascinating nugget in a Times of London piece on the Nissan Leaf. The revelation by Nissan EV honcho Andy Palmer to the British paper that Leaf battery packs cost £6,000 (about $9k) to produce could have been missed, buried as it was near the bottom of the story. Not only did Abuelsamid catch it, he calculated that the Leaf’s 24 kWh lithium-ion battery costs break down to a staggeringly cheap $375 per kWh. How cheap is that, relatively speaking? Apparently cheap enough to send Li-ion startup A123 Systems’ stock to record lows according to the WSJ [sub]. More price-comparison context and some insight into how Nissan might have beaten those costs down after the jump.

Not convinced that Nissan’s claimed kWh price is really that big of a deal? Consider that just about six months ago, GM claimed that it could get lithium-ion prices down to $500/kWh by the Spring of 2011. In support of this claim, GM’s John Lauckner bragged that:

We’ve already seen significant reductions in the cost of batteries even since the start of the Volt program. At this point, we’re hundreds of dollars below the $1,000 a kwh benchmark

At the time, Ford said the cheapest Li-ion packs it could find were in the $700/kWh range, and these were manufactured exclusively in Asia. Even the hybrid king Toyota scoffed at GM’s prediction, with since-ousted VP Irv Miller laying on the sarcasm with a firehose:

I’ll buy all those batteries that anyone can provide me right now. Our numbers are about three or four times that, so maybe we’re missing something

So how has Nissan been able to drive so much cost out of such a crucial automotive component? For one thing, signs are pointing to a building oversupply of lithium-ion capacity. Earlier this year Deutsche Bank said it was already seeing large-volume bids of about $400/kWh for lithium-ion packs… although for all we know, they were talking about the Leaf. According to a study also published earlier this year by Roland Berger Strategy Consultants,

Planned investments [in lithium-ion battery production] will thus result in significant overcapacity between 2014 and 2017, especially in the US and in Japan. Given the announced investments, capacity in 2015 will already reach 200% of the demand projected for 2016. In addition, not all investments have been announced; as-yet unknown investments by key players will lead to further overcapacity, and national subsidies will stimulate even more investments.

Which means li-ion firms could be preemptively cutting costs in order to line up long-term business. Nissan and its battery partner NEC have had a joint venture to develop lithium-ion packs since 2007, so they may also have simply stolen a march on the competition. Moreover, Nissan’s efforts to build the Leaf and its battery packs have been heavily subsidized my several governments. Nissan has received $1.6b in Department of Energy retooling loans for US Leaf and battery production, while the UK battery assembly plant (which produces at the £6k price point) has received a $30m grant from the British government, and about $300m in financing from the European Investment Bank. If the automotive lithium-ion battery market is in fact headed for oversupply, these incentives will only drive prices down and companies like A123 out of business.

The final piece of this puzzle lies in the Leaf’s battery pack itself. As a pure EV, the Leaf will likely face less battery stress than a hybrid or extended-range EV like the Volt, since the battery won’t be fully discharged as often. Possibly because of this, Nissan has decided not to fit the Leaf with active thermal management, which almost certainly helped keep costs down. On the other hand, if Leafs have problems in the Southern California summer heat, those savings could come back to haunt Nissan.

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49 Comments on “Nissan Leaf Battery Packs Break The $400/kWh Barrier...”


  • avatar

    Where does all this leave Tesla? Their battery know-how was supposedly more marketable than their actual cars, but the article never mentions them.

    • 0 avatar
      Mercennarius

      Tesla is far to small of a company to compete with Nissan on the grand scheme of things.

    • 0 avatar
      daga

      Mercennarius: Well, Daimler didn’t seem to think so.

    • 0 avatar
      mythicalprogrammer

      Err… what? Tesla is high end cars where as Nissan is making appliance EV cars (until the next GT-R supposedly). It’s almost like comparing a niche Aston Martin to a mass producing big automotive.

      Tesla should brand themselves as some kind of high end luxury brand cause it won’t really justify their car prices. Which I don’t see they can do since EV market is in its infancy and you’re trying to market it as a luxury. Unless they have some nice looking design like Frisker, sweet designs and interiors are inline with their price level.

    • 0 avatar
      L'avventura

      For the batteries themselves, Telsa batteries are supplied by Sanyo, and have recently announced they will be supplied by Panasonic in the future (not surprising being that Panasonic bought Sanyo).

      It looks to me that the big players will eventually push out the small players, which is expected as a business matures and becomes consolidated. At this point it seems NEC, Panasonic, LG, and BYD are well positioned.

      The Leaf has vaulted NEC to the top of this market, being that only Nissan plans on building 500k EV vehicles globally in the next few years. The Volt and others is nowhere near those numbers, and the Leaf has factories in the US, Japan, and Europe, and possibly China as well.

      This $400/kWh is taken with this economies of scale in mind.

  • avatar
    Some Guy

    “the Leaf will likely face less battery stress than a hybrid or extended-range EV like the Volt, since the battery won’t be fully discharged as often.”

    Interesting way to put it. The batteries will remain good because people will be too scared to drive them to anywhere near their range limits. I can see it now: 3-year old ex-leased Leafs on the used car market with less than 15,000 miles on them.

    • 0 avatar
      mythicalprogrammer

      Previous GM EV1 owners would prove you wrong.

    • 0 avatar
      Robert Schwartz

      Trying to make a bug seem like a feature.

    • 0 avatar

      Nissan actually has an interesting solution to this – the navigation system, which is standard in all Leafs (Leaves?), has a dynamically updated listing of charging stations built into their standard equipment navigation system.

      So in theory if I wanted to go from West Palm to Miami for the day, I could find a nearby charging station, hook up and be good to go by the time I wanted to return. This is pretty viable for, say, a trip to the beach or a major shopping center where you stay in one place for a while instead of running around continuously.

      I emailed CarCharging.com , a web site cited by Nissan as a partner in this, and a very nice fellow wrote me back straight away. He said that he expected contracts from municipal authorities, such as beaches, to be made. Although he had no definitive plans to announce, he did say that once he negotiated early contracts with municipalities, he expected precedent to be set and a lot of agreements coming shortly thereafter.

      So it looks to me like Nissan has some good plans in this regard and if the system performs as advertised in my area I think it will be very worthwhile.

      This news also makes me wonder if I could spend another $5k or so and get 150 miles per charge which seems a lot more viable to me. If I could do that I might be able to get from West Palm to Miami and back, especially since most of the route is very efficient freeways where the car is probably running at close to optimal efficiency.

      Another possibility is that if cells increased in efficiency it might be possible to swap out the pack for one double the efficiency, which would give me 200 mile range – and I think that spells genuine viability for a majority of customers, even for day trips like West Palm to Miami and Los Angeles to Newport Beach.

      D

    • 0 avatar
      MBella

      Hybrids also don’t fully discharge or fully charge. NiMH batteries are charged to about 80% capacity, and are allowed to discharge to around 50%. This makes it possible to use the batteries for an extended period of time. Otherwise, you would be buying new Prius batteries every year. A big no no. I believe the thinking with Lithium Ion batteries is that they can discharge them more and still keep them reliable, but it’s still nowhere close to fully discharged.

    • 0 avatar
      Daanii2

      Lithium ion batteries are powerful but fickle. NiMH batteries are more steady. I’m betting that some Tesla Roadsters are getting an unpleasant surprise by now as their daily range tumbles.

    • 0 avatar
      mythicalprogrammer

      “Another possibility is that if cells increased in efficiency it might be possible to swap out the pack for one double the efficiency, which would give me 200 mile range – and I think that spells genuine viability for a majority of customers, even for day trips like West Palm to Miami and Los Angeles to Newport Beach.”

      … I dunno if you should get a Leaf if you’re planning to travel that far. Not only that, swapping the battery out for a double efficiency one would cost a lot. Sure it’s ~375 bucks per kwh and after a few years it’ll goes down to maybe just above half of that so…$187.50? Double of the current, 40kwh, is 80kwh so you’re paying $15,000! Mind as well get a regular ICE car.

      Seriously, EV’s usually are marketed as urban daily driver.

    • 0 avatar
      mythicalprogrammer

      “Another possibility is that if cells increased in efficiency it might be possible to swap out the pack for one double the efficiency, which would give me 200 mile range – and I think that spells genuine viability for a majority of customers, even for day trips like West Palm to Miami and Los Angeles to Newport Beach.”

      … I dunno if you should get a Leaf if you’re planning to travel that far. Not only that, swapping the battery out for a double efficiency one would cost a lot. Sure it’s ~375 bucks per kwh and it’ll goes down to maybe just above half of that so…$187.50? Double of the current, 40kwh, is 80kwh so you’re paying $15,000! Mind as well get a regular ICE car.

      Seriously, EV’s usually are marketed as urban daily driver.
      —-
      “Trying to make a bug seem like a feature.”

      We know the limitations of EV.

      It’s like saying unsigned int have no negative number, omg it’s a bug!

      Omg, C++ doesn’t have a garbage collector?! BUGS! I get memory leak anxiety.

    • 0 avatar
      Rod Panhard

      David Dennis, you could take the metro train from WPB to MIA, too, and leave the Leaf at home.

      That’s the irony of the electric car. It will work best in urban areas that are already served by mass transit. But when I think of my old suburban commutes from Alpharetta to downtown Atlanta (23 miles, one way), I’d have to approach that with caution. Unless there was a parking garage with reasonably priced charging stations located near the office, I probably wouldn’t touch it.

      But now in suburban New Jersey, in one of many towns that have rail service, I know this car will appeal to my tree-hugging ecoweenie neighbors.

      For me, the big question is “Will the sanctimonious mathematically challenged Prius drivers dump their hybrid for an electro?”

    • 0 avatar
      1996MEdition

      SOmeone correct me if I am wrong here…..I remember reading somewhere that one of the advantages of Li-ion was that it could be fully discharged without penalty. Any Li-ion experts out there?

    • 0 avatar
      psarhjinian

      SOmeone correct me if I am wrong here…..I remember reading somewhere that one of the advantages of Li-ion was that it could be fully discharged without penalty. Any Li-ion experts out there?

      LiIon can be discharged without harm. What it cannot handle as well is overcharging and heat. Every battery has problems:
      * Lead acid doesn’t handle a full discharge well. It’s also heavy and toxic.
      * Nickel Cadmium suffers memory effects (eg, if you don’t run it flat and/or fully charge it, you kill capacity), holds a pitiful charge and is toxic as all hell.
      * Nickel-Metal Hydride is probably the best of the bunch in terms of health, but it’s capacity is not great. It’s not particularly toxic.
      * Lithium Ion and it’s derivatives are lighter and more energy-dense, but they’re sensitive to overcharging, very sensitive to heat and can fail catastrophically. They’re also subject to “rot”: if left alone, they lose capacity. They also require more complex charge-management.

    • 0 avatar
      lundbergaj

      Of course, driving the car 50 miles a day would be 17500 miles a year, so those 3 year old cars could have 50,000 miles without being driving anywhere near their daily range.

      I’ve had a Prius since they came out in 2001, and I put more miles on it than my other cars simply because it costs half as much to power. I’m waiting on my Leaf delivery (they just got orders going here in MD) but I expect to put plenty of miles on the Leaf. My quick calculations figure it will cost 1/3rd of what the Prius costs to drive, or 1/6th of what my 20 mile per gallon casrs cost.

      With the Leaf being so cheap to drive, I’d guess many people will use it whenever possible, a I will.

      Andrew

  • avatar

    “the Leaf will likely face less battery stress than a hybrid or extended-range EV like the Volt, since the battery won’t be fully discharged as often.”

    Doesn’t make sense to me. The hybrids are kept within a pretty narrow range, something like 30% of the entire charge-discharge cycle. X-ranges maybe somewhat more.

  • avatar

    If they’re deliberately doing overcapacity, that sucks, because it will push small competitors–who might come up with better innovations–out of business.

    • 0 avatar
      mythicalprogrammer

      Welcome to capitalism. It does suck.

      But big companies will probably compete with each other with innovative technologies. Once and a while they’ll lag behind and twiddle their thumbs but the government will mandates high MPG or whatever to push for more innovations.

    • 0 avatar
      FleetofWheel

      Small companies can still innovate and then sell or license their design to the big guys which is actuallly preferable in many cases as then the small firm does not have to be bothered with manufacturing on a large scale, warranty claims, etc. Lotus engineering, for example.

  • avatar
    Jimal

    Until the Leaf is independently tested beyond the reach of the watching eyes of Nissan engineers and in “real world” conditions, it is as much vaporware as the Volt.

    • 0 avatar
      jstack6

      I own a LEAF, it’s way better than they say. I’ve gone over 130 miles on a charge. I get 9 miles per KWh which is 10 cents in most of the USA. So I use American power to go 90 miles on $1. I program it to charge to 80% at night Off Peak 11 pm to 5 am and it’s normally done in 1-2 hours.

      A gas car uses 50% imported OIL, is only 20% efficient and most only go 20 miles on a gallon of $3.50 gas which is 1/2 the real cost. It makes deadly pollution and idles getting negative mpg, brakes wasting energy and making dust and heat.

      I love EVs.

      • 0 avatar
        darkhorse

        jstack6, why only 80%. is there a problem taking it to 100? I’m thinking of buying one of these things but I really want to look before I leap.

  • avatar
    Daanii2

    The Leaf will have a lot more stress on its battery than a parallel hybrid like the Prius. But perhaps less than a series hybrid like the Volt. As noted, the Leaf’s bigger battery (100 mile capacity) will make it less necessary to charge than the Volt (40 mile capacity).

    It will be interesting to see how the Leaf and Volt turn out. I don’t think anyone can predict how well they will do. But both will be well-engineered and well-made cars, much better than the Tesla and Fisker experiments. Nissan and GM know how to make cars.

    I don’t know what to say about the purported $375 per kWh for lithium-ion battery packs. Seems unlikely to me. But who knows. The battery industry has been full of slimy salesmen since the 1800s. You can’t trust anything battery people tell you about pricing or performance.

    • 0 avatar
      mythicalprogrammer

      I think Frisker is well made. The engine is from GM eco-tech series and their hybrid electric system is from a DoD contracted company that supposedly have been making system like this for the US army.

    • 0 avatar
      Daanii2

      Take a look at Quantum Technologies financial statements if you want a scare about Fisker. Quantum is supposed to be developing the electric drive train for Fisker. But Quantum looks to be near a scam. Not the reliable, proven performer that Fisker (itself a startup) needs.

  • avatar
    frozenman

    This is great news for those of us who have electric vehicle manufacturing investments! Bringing the costs down can only mean larger acceptance of ev’s and larger volume of sales. Here’s a stock tip: Azure Dynamics Corporation (AZD), partnered with Ford for transit connect ev production, and no, I’m not pumping the stock. Just color me excited :)

  • avatar
    jmo

    The batteries will remain good because people will be too scared to drive them to anywhere near their range limits.

    The average driver drives 15k a year or about 40 miles a day. With a 100 mile range the average US driver will use about 40% of the battery capacity on an average day. i can only assume that some Nissan wonks did a study of driving habits and found that X% of US drivers drive more than 100 miles a day less than Y% of the time. For the average family, this may mean that on the 1% (3.65 days) of the year that you need to go more than 100 miles, you take the family’s ICE vehicle.

    • 0 avatar
      mpresley

      Ummm…let me get this straight. I have to own an ICE vehicle just to use 4 days out of the year? Does that make sense to anyone? Averages are misleading and have nothing to do with real world conditions. No one drives in an “average” way, and pretty soon, the limitations of a battery only car will begin to show.

      • 0 avatar
        lundbergaj

        Yes, the Leaf isn’t really a great choice if you own only a single car. Our Leaf will be number 4 at out house (we may cut back to 3, but we might not). We live in a city and can definitely handle having one car that can only go 100 miles before plugging in. Frankly, I expect plugging in will be less of a hassle than stopping by a gas station once a week.

        Andrew

    • 0 avatar
      jmo

      M,

      You’re right! A two car family – who’s ever heard of such a thing?

    • 0 avatar
      ClutchCarGo

      “I have to own an ICE vehicle just to use 4 days out of the year?”

      That’s why rental car companies exist. If an EV works for a family most of the time, a rental will fill the gaps.

    • 0 avatar
      mpresley

      Sorry…if I’m going to have to spring for two cars just so I’ll be able to go on a “longer than average” trip, I’m not spending $ for an electric. And neither will many other people. Better to buy two gasoline (what about a small diesel?) cars and increase flexibility a hundredfold. Besides, with my luck, the “big D” would show it’s ugly face, and the ex would take the real car, leaving me with the Energizer. It’s all good in theory, but when it comes time to lay down serious dollars, it’s an answer to a question no one is really asking.

    • 0 avatar
      mpresley

      …that’s why rental car companies exist.

      And all this time I thought they existed in order to give Chrysler a competitive sales edge. On the other hand, if it ever came down to a Sebring, or a Nissan with a dynamo, I’d probably be thinking Schwinn, or New Balance.

    • 0 avatar
      joeaverage

      How about a lift out Honda EU-series style (quiet) generator? Something that is fully pollution reg’d and safe? Or something for the house that powers the house AND an EV in case of a power failure so you can still get to work?

      All sorts of new problems will come with the EV and all sorts of new opportunities for creative people to sell some fixes.

      I’m anxiously awaiting the arrival of the mainstream working man’s EV. I’ll gladly buy one for my ~10 mile commute (each way). Nissan is going to have to prove to me though that the batteries will last 100K miles first.

      I’d gladly rather spent X-dollars on battery and electricity than the same X-dollars on gasoline – see the Middle Eastern wars, Gulf of Mex pollution, American dollars going to the Middle East, etc…

  • avatar

    You can buy of-the-shelf lithium batteries for $345/kwh right now..

    http://evcomponents.com/cscart/index.php?dispatch=products.view&product_id=29845

    Granted these are chinese cells and perhaps not up to the standards of Nissan but they seem well regarded in the conversion community.

    This “scoop” that was made yesterday is not news, its based on a month old newspaper article.. it was even discussed in forums extensively at the time.. In any case, did the Times get the number right?.. who knows.

    Nissan did not use liquid cooling in their packs because their cells were designed specifically not to need them, probably a side benefit to also designing their cells to be fast charged in 30 minutes, an ability the LEAF has.

    Nissan is promising to upgrade the 2014 LEAF with the 2nd generation of these cells, 200 mile range at the same cost.

  • avatar

    “if Leafs have problems in the Southern California summer heat”

    Or a Chicago winter. One wonders if Nissan has really thought through the cold-weather issues… it never seems to get mentioned.

    • 0 avatar
      Disaster

      Li-Ion does much better in cold weather than the NiMh other manufacturers are using.

      The A123 Lithium technology was developed at MIT and is far superior to conventional LithiumIon batteries. It can be discharged further and faster without damage and can handle 100 times more charge cycles than the Li-Ion batteries in cell phones. Sony and Panasonic have similar durable LiIon batteries. The negatives are the voltage and storage capacity are a bit lower than conventional LiIon batteries and they are more expensive (though, in this case, it looks like Nissan is going OK.) It is impossible for the A123 batteries to catch fire, like the stories you read about laptop batteries. This would explain why Nissan doesn’t require as expensive a temperature protection technology as competitors.

    • 0 avatar
      Daanii2

      I’m not as sold on A123′s lithium ion technology as Disaster is. And the thermal management is for longevity, not safety.

      Nissan is gambling by not having active thermal management. Many customers are (I think) going to find their battery life much shorter than promised. As in a permanent loss of capacity of 2% to 3% per month.

    • 0 avatar
      Disaster

      A123 technology doesn’t require as close temperature monitoring, not just because it is safer, but because the batteries can take more heat in the first place. That is why they can charge and discharge at considerably higher rates (100c vs. 20c) than regular LiIon batteries. They are the technology behind DeWalt’s tool batteries, which likewise don’t have temperature or discharge protection.

      Typical LiIon technology loses about 10-15% of it’s capacity every year regardless of duty cycle. Do you think that will be raised to 30-40% with the Leaf?

  • avatar
    Lexingtonian

    Personally, I wouldn’t be surprised to see several jumps in battery technology over the next few years.

    Much of the technology being used has been driven by the computer industry for years, whether for laptops or the glorified palmtops we call modern cell phones. Hell, the Tesla Roadster runs on repurposed laptop cells.

    The trick is, historically in the tech industry, when one expends engineering resources to improve mobile device functionality, it has been vastly cheaper (for the same impact) to engineer components which use less juice than batteries that provide more juice. As a result, battery technology hasn’t improved nearly as much as reduce-battery-use technology.

    Now that we have a huge international market for batteries and little optimization to be done on the drain (as electric motors are *extremely* efficient), there’s going to be *vastly* more resources spent on making the batteries better — when historically the drivers of the technology have been more focused on using less juice. Sure we’ll see jumps in the efficiency of electric HVAC units, but the main draw is still going to be the motor which isn’t going to get a whole lot more efficient any time soon.

    So big jumps in small amounts of time shouldn’t be too surprising.

  • avatar
    Lexingtonian

    Also, I’d just like to point out that, theoretically, the battery pack can not only be located anywhere in the car, but as it’s composed of discrete cells, it doesn’t have to be contiguous, and it’s far heavier than the motor powering the car.

    This excites me, because it means that as the technology matures and the market moves into roadsters that don’t cost six figures, the typical electric car built for sportiness *should* (at least) have perfect weight balance.

    And a flat torque curve.

    Yummy.

  • avatar
    FleetofWheel

    Since we can expect frequent advances in EV technology over the next decade, the EV car you buy in 2011 will seem pretty outdated by 2014. That will affect their re-sale value or even lead to early crushing unless they build in modularity that allows people to upgrade to the better batteries.

    Such rapid obsolescence won’t bother the bleeding edge early adopters but will make regular consumers hesitant.

    • 0 avatar
      jstack6

      FleetofWheel,  a prius holds it’s value much better than any car. As gas prices rise so does their value and that of pure 100%  electrics.

      The USA hit peak oil in 1970 and now imports 50% of the OIL you burn each day at a cost of $1 Billion a day. What does that do to our economy not to mention the environment.

      My new LEAF is way better than any specs. It’s real and only cost $1 of US power to equal 2 gallons of gas costiong $7 today April 2011. It’s simple math, either you care and help the USA or import OIL .

    • 0 avatar
      psarhjinian

      Such rapid obsolescence won’t bother the bleeding edge early adopters but will make regular consumers hesitant

      On the other hand, it’s a lot easier to swap electric motors and batteries than an entire ICE powertrain (in a modern car)

  • avatar
    jstack6

    You can charge a LEAF 100% but the battery may last twice as long at 80% charge and it still goes a true 100 miles. AT 100% you can’t regen for the first few miles and battery life is “ONLY”, 8 years 100K miles. I want 200K or more.

  • avatar
    Bigsemitruck

    No Leaf will cheat you when you are out of battery leaving you in the halfway of the road while Chevy volt got two sources when the battery run-out you’ll have the gas option. http://www.remarkabletrucks.com/

    • 0 avatar
      joeaverage

      Where is the cheat? The Leaf has a range and it’ll tell you what you’ve got left. My gasoline powered vehicle does the same with a gas gauge and a trip odometer. It’ll go 320 miles (maybe a bit more) or until the needle points at “E”. No different than the Volt. Of course the GMC truck owner I saw broken down on the side of the road this morn was a bit surprised. His gas gauge said he had gas left and there he was staring at the open hood talking to somebody on the cellphone about a ride to work. It could happen to any brand though. None are foolproof.


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