• OEMs including Tesla have stated the need and plans for a $25,000 battery electric vehicle (BEV).
• A $25K BEV will need to match internal combustion engine (ICE) counterparts in features and performance while maintaining thin margins that rely on volume sales.
• Cell/pack cost reduction is the path forward with chemistry-agnostic manufacturing technologies.

The late Fiat Chrysler Automobile CEO Sergio Marchionne was one of the boldest business leaders of his generation and had a reputation for an outspoken and often blunt approach. This was especially true when he shared his thoughts on the Fiat 500e, a BEV version of the popular Fiat 500. “I hope you don’t buy it because every time I sell one it costs me $14,000,” he said to an audience at the Brookings Institution in 2014 about the 500e. “I’m honest enough to tell you that.”

• Significant $/kWh cost reduction from material technology is becoming more difficult as we approach theoretical gravimetric density limits and cost floors of raw materials.
• Cost reduction technology will be led by electrode manufacturing which can account for about half of total manufacturing costs.
• The wet (solvent + drying) and dry (less/no solvent, less/no drying) electrode manufacturing technology segments will be compared for potential benefits and limitations in mass market applications.

 

Sony introduced the first rechargeable commercial lithium-ion battery in 1991 at a price exceeding $3,000/kWh. Since then, price per kilowatt-hour ($/kWh) has decreased an estimated 97%, largely due to material improvements in both performance and cost. What has changed little in over three decades is how lithium-ion batteries are manufactured. Because material cost constituted such a large portion of total production costs technology improvements focused on materials rather than manufacturing technology.

• By 2030, up to 84% of BEV sales may have non-NCx (eg. LFP) cells, a change from near 0% in EU and North American markets today. This shift is driven by the inherent advantages of LFP over NCx chemistries in terms of cost, safety, reliability, and ESG.
• The volumetric and gravimetric density for cost tradeoff has reached a point where the same envelope for cells can be used for different BEV segments. Announcements of unified BEV platforms having different chemistry options by Tesla, VW, and Stellantis for high-volume BEVs will create significant Non-NCx markets.
• This will incentivize cell manufacturers to offer both NCx and non-NCx products where they have traditionally preferred only one.