How Electric Vehicle Battery Prices Can Fall in the Coming Decade

How Electric Vehicle Battery Prices Can Fall in the Coming Decade

Read Time: 5 Minutes

At the 2016 General Motors shareholders meeting, Mark Reuss — who would become GM’s President in 2019 — told shareholders that the company was paying $145 per kilowatt-hour for the LG Chem cells used in the Bolt EV, which was coming out later that year. Today, those same cells are probably about $130 per kilowatt-hour. That’s still too expensive, but with materials changes and production improvements, as well as vertical integration between GM and LG Chem, the price should go down to about $100 per kilowatt-hour by 2024 at the latest.

At that stage, we’ll reach a break-even point as far as profitability for a $25,000 sedan, and it puts SUVs and trucks at a similar level of profitability as their internal combustion engine counterparts. That’s very good news for automakers.

Near the end of the decade, cell costs could go down to $75 to $85 per kilowatt-hour, which will require major materials changes and volume increases. At that price point, electric sedans, SUVs, and trucks are actually more profitable than equivalent internal combustion engine vehicles, meaning original equipment manufacturers will no longer want to make the latter.

Energy Cells: What Must Be Done

But there’s a long way to go before we get to that point. Energy cells — vital for electric vehicles because they provide a vehicle with its power and range — are also the most expensive component and therefore impact profitability for automakers.

Approximately 70% to 80% of a cell’s cost is in its materials, with the cathode material making up as much as 40% of that. Because of the high materials cost to the overall expense of battery cells, there’s a lot of new, low-cost, high-capacity, high-energy materials being developed.

There are currently three main types of cell formats: cylindrical (used by Tesla), prismatic can, and pouch (basically a polymer aluminum laminate material that’s used to encase the cells or the electrodes for the cell). It should be noted that heat is the number one killer of any battery chemistry — it’s what causes degradation, loss of capacity, and early failure to occur. Here are the pros and cons of each:


  • Pros: high energy density, because of the winding material used to make the cells; being metal cans, they’re fairly robust
  • Cons: the shape of battery packs causes loss of energy density (round cells in a rectangular box); tends to be heavier due to extra material needed to hold large number of cylindrical cans in place; low capacity means more cells needed in battery packs compared with other cell formats; cans can violently vent; not suited for future chemistries, especially solid state
  • Notable suppliers: Panasonic, LG Chem, Samsung SDI, Saft


  • Pros: robust; many suppliers, making it cost competitive
  • Cons: made of heavy metal that causes battery packs to be weighty; internal design changes will be needed for future cell chemistries
  • Notable suppliers: Panasonic (and subsidiary Sanyo), Samsung SDI, CATL, Northvolt, BYD


  • Pros: intrinsically low cost because of the polymer laminate material, which also makes it lighter weight; unable to be made into thick cells so more easily controlled thermally; longer life than other formats; seem better suited for future chemistries due to their ability to expand and contract; safer due to lower melting point, leading to fewer gas and smoke emissions
  • Cons: more care needed for handling cells
  • Notable suppliers: LG Chem, SK Innovation, Envision AESC, Farasis, Coslight, Wanxiang A123

One of the main issues with cells is that up to 40% of their costs is the cathode material alone. Over the years, companies have increased the nickel content while lowering cobalt, which boosted energy density while reducing the price. Will nickel in the cathode materials be the next to go? There are environmental reasons to do that, as some soluble nickel compounds can cause cancers if they get into the drinking water.

One way to do that is by introducing 5-volt cathode materials, which usually contain no or low amounts of nickel. The big draw of these is that it will reduce the number of cells in the battery pack, which could lead to huge savings if companies are able to reduce 15% of the cells in a pack. Unfortunately, there are no good 5-volt materials at the moment. On the other side of the separator are anode materials. A lot of work is being done on lithium metal-based systems and silicon electrodes of 90%-plus silicon as their composition.

Other Ways to Reduce Energy Cell Costs

To keep costs low, producers should consider localizing the supply of components for the cells, including electrolyte separator, cathode, and anode materials. Transportation costs could be reduced if cell production is located next to auto plants.

Vertical integration is another method to keep costs down, in particular joint ventures between cell manufacturers and OEMs.

Future of Electric Vehicles: Silicon-Based Anode Cells?

But what will make the biggest difference is the development of better battery technologies. The one with the most promise is silicon-based anode type cells. They have better energy and power performance compared with lithium-ion cells, because they use a liquid electrolyte and thin separator material. However, cycle life for anode type cells is not as good as lithium-ion cells.

Most companies will agree that at least in the short term there will likely be a switch from lithium-ion to higher-energy-density silicon anode type cells. That is at least until solid-state batteries are commercially viable for the automotive industry. But by that time, they may have a tough entry into the automotive industry due to improvements to silicon cells. Already, they’re well above 800 watt-hours per liter. By the end of the decade, they’ll likely be at 1,000 watt-hours per liter with a cost per kilowatt-hour similar to lithium ion cells.

Greg MacLean, Ph.D., is the former Lead Engineer and BOM family owner for advanced battery cells at General Motors. The cells are used in all of GM’s 48V, HEV, PHEV/EREV, and EV battery packs and vehicles. While at GM, Greg was also responsible for benchmarking the battery cells used by GM’s OEM competitors, as well as those being developed by the major cell manufacturers around the world.

This electric vehicle industry article is adapted from the GLG Teleconference “Electric Vehicle Battery Cell.” If you would like access to this teleconference or would like to speak with electric vehicle experts like Greg MacLean or any of our more than 900,000 industry experts, contact us.

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