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Chart: Behind the Three-Decade Collapse of Lithium-Ion Battery Costs

Cheap lithium-ion batteries now dominate consumer electronics; look out, auto industry

2 min read
Image of cylindrical lithium-ion battery cells coming off production line.
Wan Shanchao/VCG/Getty Images

Behind clean energy today is a sharp, continuing drop in photo­voltaic solar-cell prices. And behind the scenes, the prices of lithium-ion batteries are plummeting just as quickly. Between 1991 and 2018, the average price of the batteries that power mobile phones, fuel electric cars, and underpin green energy storage fell more than thirtyfold, according to work by Micah ZieglerJessika Trancik and at the Massachusetts Institute of Technology.

Engineers and energy-policy planners benefit from knowing future battery prices, but unlike solar prices, they aren’t always readily available. Lithium-ion batteries tend to be manufactured or bought in bulk by large companies. “Those contracts aren’t necessarily public documents,” says Ziegler. That’s partly why the drivers for the price decline are, for Ziegler and Trancik, an open area of research. Ziegler and Trancik published their comprehensive survey of studies of lithium-ion battery prices in a recent issue of the journal Energy & Environmental Science.

Batteries today, the researchers say, have mass-production scales and energy densities unthinkable 30 years ago. Economies of scale and technological improvements appear set to drive storage costs further, approaching the $100 per kilowatt-hour threshold. At about that level, the energy costs for EVs will reach parity with those for gasoline-powered vehicles, according to Bloomberg New Energy Finance.

The overall price decline of lithium-ion batteries—scaled by energy capacity, since their 1991 commercial introduction—is a staggering 97%.

Of course, as battery production increases, so does the pressure to drive down prices. Battery recycling has also reduced the need to mine for new materials, according to Annick Anctil, a sustainability researcher at Michigan State University. And lithium-ion batteries and solar cells often coexist: “As we’re installing a lot more solar,” Anctil says, “we’re also more interested in putting [in] more storage for it.”

The first commercially available ­lithium-ion battery was released by Sony and Asahi Kasei in 1991. It was cylindrical, like many batteries today, but other shapes have emerged since then. “I think an important aspect of this work is that we differentiated the trends for all types of lithium-ion cells from those specifically for cylindrical cells,” says Ziegler.

Prismatic lithium-ion batteries tuck the battery inside a flat-pack casing, allowing them to be easily stacked. They’re commonly found in mobile phones and in electric vehicles, although Tesla has long used cylindrical batteries.

Pouch batteries first arrived in the world in the mid-1990s, and replaced the hard shell of their counterparts with a flexible, lightweight “pouch” that looks like the packaging of an astronaut meal.

This article appears in the June 2021 print issue as “The Tech That Crushed the Cost of Energy Storage.”

The Conversation (1)
Winfried Rauscheder17 Nov, 2021
INDV

Without the availability of innovative, powerful, and cheap electricity storage systems the transition from the `fossil age´ of burning masses of coal, oil and gas to produce the electric power we need in 2040 or 2050 will definitely not be possible. I am convinced that we will need a completely new topology of electricity grids within the next ten years - and in this future grid, buffer batteries will play a decisive role. So yes - let´s get cheaper with these batteries! This is an absolute must!

This Dutch City Is Road-Testing Vehicle-to-Grid Tech

Utrecht leads the world in using EVs for grid storage

10 min read
This photograph shows a car with the words “We Drive Solar” on the door, connected to a charging station. A windmill can be seen in the background.

The Dutch city of Utrecht is embracing vehicle-to-grid technology, an example of which is shown here—an EV connected to a bidirectional charger. The historic Rijn en Zon windmill provides a fitting background for this scene.

We Drive Solar

Hundreds of charging stations for electric vehicles dot Utrecht’s urban landscape in the Netherlands like little electric mushrooms. Unlike those you may have grown accustomed to seeing, many of these stations don’t just charge electric cars—they can also send power from vehicle batteries to the local utility grid for use by homes and businesses.

Debates over the feasibility and value of such vehicle-to-grid technology go back decades. Those arguments are not yet settled. But big automakers like Volkswagen, Nissan, and Hyundai have moved to produce the kinds of cars that can use such bidirectional chargers—alongside similar vehicle-to-home technology, whereby your car can power your house, say, during a blackout, as promoted by Ford with its new F-150 Lightning. Given the rapid uptake of electric vehicles, many people are thinking hard about how to make the best use of all that rolling battery power.

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