A new McKinsey & Co. report predicts that the price for EV batteries will drop 70% in the next 10 years.
Currently the price of the EVs is high because the lithium ion batteries that power them cost a lot. But the McKinsey & Co. report predicts that by 2022 the price for electric vehicles batteries will decrease 70%, which could create waves for the electric power and petroleum industries, as well as foe the auto industry.
Today the price of auto battery packs is between $500-$600 per kilowatt hour, but it could fall to around $200 by 2020 and $160 by 2025. This will be possible with a fall in component prices, and economies of scale. The demand for EVs is expect to increase in the near future also because of tighter environmental regulations and energy standards which will be introduced in the following ten years.
“Given the path to substantially lower battery prices, which are now coming into view, executives should be considering bold actions to capitalize on one of the biggest disruptions facing the transportation, power and petroleum sectors over the next decade or more,” the report said.