Li-ion battery cost improvements grossly underestimated, MIT report says

A new in-depth report from researchers at the Massachusetts Institute of Technology (MIT) says that the rate of improvement for lithium-ion cells that power electric cars has been grossly underestimated because most analyses have only measured one battery performance characteristic: energy capacity.

Implications of the study’s findings are encouraging for both the electric vehicle and energy storage industries, which together have significant potential to help mitigate carbon emissions and the impacts of climate change.

The current cost of making batteries is limiting the ability of electric vehicles and home batteries to achieve mainstream adoption, and although costs are expected to drop in coming years the researchers say how this is measured differs considerably from report to report.

In December, BloombergNEF reported that battery pack prices fell below $US100/kWh for the first time, for e-buses in China. But while $US100/kWh for battery packs is cited as the point at which EVs will reach purchase price parity with combustion engine vehicles, the industry average still sits at $SU137/kWh.

The MIT paper seeks to harmonise findings to better understand “how these and other energy and environmentally relevant technologies change over time, to refine efforts to inform public policies, investments, and technology development.

Titled “Re-examining rates of lithium-ion battery technology improvement and cost decline”, the paper from researchers at the Institute for Data, Systems, and Society at MIT notes that li-ion battery prices have dropped by 97% since their introduction commercially in 1991 and other than a few exceptional data points in 1995 and 2008, the decrease in prices has been consistent.

Moreover, the increase in demand for electric vehicle and energy storage batteries has seen an increase in what the researchers refer to as “real price per energy capacity”.

“These increases suggest that previously reported improvement rates might underestimate the rate of lithium-ion technologies’ change,” the authors of the report write.

“Moreover, our improvement rate estimates suggest the degree to which lithium-ion technologies’ price decline might have been limited by performance requirements other than cost per energy capacity.”

They say that prices declined by 13% until 2016 for all types of cells and after then, 24% for cylindrical cells and 20% for other types.

And that rate could increase further, they say, because most analyses have only considered price improvements by battery energy capacity. Considerable research and development put into improving other battery characteristics such as energy-density, cycle-life, temperature sensitivity and safety will further improve battery prices.

On top of that, the researchers also note that in batteries used for energy storage, the improvements in price could be greater again, because the performance characteristics generally focussed on by past research are not as exacting for storage applications.

“These rates also suggest that battery technologies developed for stationary applications, where restrictions on volume and mass are relaxed, might achieve faster cost declines, though engineering-based mechanistic cost modelling is required to further characterize this potential,” the researchers write.

Citation:

Re-examining rates of lithium-ion battery technology improvement and cost decline
Micah S. Ziegler and Jessika E. Trancik
Published on 23 Mar 2021
Energy Environ. Sci., 2021, Advance Article
https://doi.org/10.1039/D0EE02681F