Close [X]

Falling battery prices to spur demand for EVs: research

The expected fall in the price of batteries over the coming years would make electric vehicles (EVs) a more economic option than petrol or diesel cars in most countries, says a new research report.

According to the report by Bloomberg New Energy Finance, the continuing fall in battery prices will bring the total cost of ownership of EVs below that for conventional-fuel vehicles by 2025, even with low oil prices.

The study projects that sale of EVs would touch 41 million by 2040, almost 90 times the existing figure of 462,000 in 2015. The research estimates that the growth of EVs will mean they represent a quarter of the cars on the road by that date, displacing 13 million barrels per day of crude oil but using 1,900TWh of electricity. This would be equivalent to nearly 8% of global electricity demand in 2015.

Colin McKerracher, lead advanced transportation analyst at Bloomberg New Energy Finance, said: "At the core of this forecast is the work we have done on EV battery prices. Lithium-ion battery costs have already dropped by 65% since 2010, reaching $350 per kWh last year. We expect EV battery costs to be well below $120 per kWh by 2030, and to fall further after that as new chemistries come in."

Salim Morsy, senior analyst and author of the study, commented: "Our central forecast is based on the crude oil price recovering to $50, and then trending back up to $70-a-barrel or higher by 2040. Interestingly, if the oil price were to fall to $20 and stick there, this would only delay mass adoption of EVs to the early 2030s."