Lithium Ion Batteries May Reduce Electric Car Prices Considerably

The lithium-ion batteries for electric cars are now being tested by several giant automakers such as Toyota, Daimler or Bayerische Motoren Werke. The batteries, assembled by Silicon Valley startup Tesla Motors, cost less than the larger traditional ones developed exclusively for cars.

Tesla Motors’ $109,000 price tag roadster sports car is powered by a pack of 6,831 Panasonic cylinder-shaped cells and give the car a range of up to 245 miles.

According to Sanyo Electric, the sales of lithium ion batteries will more than triple to $60 billion during the next 10 years. Large-scale economies may contribute to cutting down on manufacturing costs and, consequently, price reduction of rechargeable electronic batteries, an analyst at Tokyo-based Advanced Research Japan told Bloomberg.

Koji Endo said that “It may lead to the total component cost of an electric car getting lower than that of a gasoline car. As the cost lowers, there’ll be more likelihood that retail prices of electric cars will drop.”

Currently, electric vehicles are more expensive, due to the high cost of batteries, said Bloomberg. J.D. Power and Associates estimated in October that approximately 954,000 electric cars and hybrids will sell this year, totaling a 2.2% of all car sales. From the 71 million cars estimated to be sold by 2020, less than 10% may be electric.

Moreover, a Kelly Blue Book survey reported that only 7% of car shoppers will consider buying or leasing a new electric car due to short travel range and scarcity of charging stations.

There have been some overheating problems with lithium ion batteries which required the recall from the market due to fire risk. An example of massive batteries recall was in 2007 when mobile phone maker Nokia offered to replaced about 46 million Panasonic phone batteries. Consequently, the present manufacturing process of batteries uses an insulator film between the electrodes to reduce the overheating risk, said Panasonic.