Electric vehicle sales have been escalating for the past few years, which is catalyzed by the reduced prices. But, the inception of Evs is still a challenge, given they have a higher face value than their ICE counterparts. The EV manufacturers say that the high cost is because they cut out many other costs incurred by using a diesel or petrol engine car. Empirically speaking, the high price of EVs is less when compared to the overall expenses incurred when using an ICE car.
EVs and the conventional cars will likely reach an absolute price in the next decade, whereby the cost of an EV will equal to buying an ICE car and incurring the resultant values. The crucial factor in the price of an EV is the battery cost. Thus, making the battery cheap would make an EV the most affordable car.
The battery costs have been going down at a sporadic speed. An EV model carries a maximum of 100 kWh of power. For instance, a Mitsubishi EV model with a battery capacity of 16 kWh can cover 62 miles.
In comparison, a Tesla Model S with the capacity of 100 kWh travels for 400 miles before a recharge. In the past decade, an EV battery going for $1000 for every kWh is currently at $150 per kWh. The EV industry, especially the manufacturers, is still experimenting on how to solve the problem of lowering costs down.
Empirically, if the price of the battery goes down to $80/kWh, the cash value of the EV will go down to the level of a similar ICE car. To estimate the period when the price of an EV will plummet to this level implies looking for a model that takes care of cost factors like labor, design, manufacturing capability, and the cost of materials. One particular research group at Carnegie Mellon University is designing an estimate of the battery costs required in making an EV battery.
One of the estimation methods is the Wright law that articulates that the cost of a battery is dependent on the number of units produced and sold. Maximizing production would mean bringing in economies of scale and thereby lower the cost of manufacturing an array. This law works even for the solar panels that generate renewable energy.
On the other hand, the battery cost may rise due to the utilization of expensive materials like cobalt. However, using low-cost materials like nickel oxide is cheap though the quality of the battery may be low. A low-quality battery implies a reduced mileage range. Therefore, scientists must work out a way to ensure they use a vastly available raw material to keep the battery’s cost down. This move will ensure that the cost of EVs facilitates the quick inception of the cars into the market.
Finally, a low battery cost of $75 per kWh will result in a car as cheap as $30000. This price is ideal compared to an ICE car.