EV Industry Develops Consensus on Battery Costs

Today’s electric cars cost thousands of dollars more than comparable gas-powered internal combustion vehicles. The key to making electric cars more affordable is reducing the cost of lithium ion battery packs, the most expensive component of an EV. What are today’s prices for EV packs? How far and fast will the prices drop? Part of the answer was revealed on April 16, 2012, when Ford CEO Alan Mulally provided a specific price range regarding his company’s electric cars. “[For] an all-electric vehicle, the battery size is around 23 kilowatt hours, and it weighs around 600 to 700 pounds,” said Mulally. “And they're around $12,000 to $15,000.” He was speaking at Fortune's Brainstorm Green conference in Laguna Niguel, Calif.

A simple calculation produces a dollar per kilowatt-hour price between $520 and $650. Auto executives are not usually that specific about electric car battery prices. “Neither the OEMs buying a battery pack, nor the manufacturers making them, like to talk about specifics for what they’re paying or what the cost is,” said John Gartner, a senior analyst at Pike Research, which has conducted multiple studies about EVs, batteries, and charging. Gartner said that determining today’s EV battery packs requires using multiple sources and “a lot of triangulation.”