A study by consulting firm McKinsey says that the cost of the lithium-ion batteries used in electric vehicles could tumble by as much as 70 percent by 2025, thanks to a combination of factors.
Widespread production of li-on batteries could be one of the main factors. Reuters explains that
McKinsey predicts the price of a complete lithium-ion battery pack could fall from between $500 and $600 per kilowatt hour now to about $200 in 2020 and to $160 by 2025. If gasoline prices hover 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.
Consumer electronics manufacturers are also expected to help make battery technology more viable, as their R&D could lead to faster charging times and longer battery life. While Apple is cited as one of the pioneers of improving li-on batteries, a more apt analogy might be that of laptop computers; 15 years ago, laptops were bulky, cumbersome and heavy with utterly dismal battery life. Today, a MacBook Air with 7 hours of battery time can be had – maybe not cheaply, but available to a broad segment of the market. It’s inevitable that EV batteries are destined for the same progression, but widespread adoption isn’t necessarily guaranteed.