Price trajectory for lithium-ion NMC battery packs, 2010-2016 and projected to 2030, adapted from Hsieh, et al. (2019). Strong learning effects in battery manufacturing (LR2 = 16.5% ± 4.5%) continue to drive price reductions over time, such that battery prices approach $124/kWh in 2030. Other scenarios suggest a price range between $93/kWh and $140/kWh in 2030 (Hsieh, et al. 2019). According to our two-stage learning curve model, the rate of price reductions slows significantly around 2025–2030 due to the growing contribution of active materials costs. As these costs account for a larger share of the total battery price, the much lower learning rate of 3.5% for the materials synthesis process (LR1) will slow further reductions in battery price with the costs of expensive cathode elements (lithium, nickel, and cobalt), eventually setting a lower bound on NMC battery prices. Graphic: MIT

By James Temple
19 November 2019

(Technology Review) – A new report from the MIT Energy Initiative warns that EVs may never reach the same sticker price so long as they rely on lithium-ion batteries, the energy storage technology that powers most of today’s consumer electronics. In fact, it’s likely to take another decade just to eliminate the difference in the lifetime costs between the vehicle categories, which factors in the higher fuel and maintenance expenses of standard cars and trucks.

The findings sharply contradict those of other research groups, which have concluded that electric vehicles could achieve price parity with gas-powered ones in the next five years. The lingering price difference predicted by the MIT report could stunt the transition to lower-emission vehicles, requiring governments to extend subsides or enact stricter mandates to achieve the same adoption of EVs and cuts in climate pollution.

Transportation is the largest source of greenhouse-gas emissions in the US and fourth largest globally, so there’s no way to achieve the reductions necessary to avoid dangerous levels of global warming without major shifts to cleaner vehicles and mass transit systems.

Chemical cost of storage and chemical specific energy in 2017 for representative electrochemical couples for EV applications. We use the term “chemical” in this context to denote the active materials in the battery, including the cathode-active material, anode-active material, and electrolyte. Whereas chemical cost, or the cost of these materials, represents a floor on the cost of the complete battery, chemical specific energy (plotted on the x-axis) is for the chemical mass of the battery only, not the full weight of the battery. Of the six categories represented in this figure, only the open square symbols represent commercially available batteries; the closed symbols are chemistries under development. Graphic: MIT
Chemical cost of storage and chemical specific energy in 2017 for representative electrochemical couples for EV applications. We use the term “chemical” in this context to denote the active materials in the battery, including the cathode-active material, anode-active material, and electrolyte. Whereas chemical cost, or the cost of these materials, represents a floor on the cost of the complete battery, chemical specific energy (plotted on the x-axis) is for the chemical mass of the battery only, not the full weight of the battery. Of the six categories represented in this figure, only the open square symbols represent commercially available batteries; the closed symbols are chemistries under development. Graphic: MIT

The problem is that the steady decline in the cost of lithium-ion batteries, which power electric vehicles and account for about a third of their total cost, is likely to slow in the next few years as they approach limits set by the cost of raw materials.

“If you follow some of these other projections, you basically end up with the cost of batteries being less than the ingredients required to make it,” says Randall Field, executive director of the Mobility of the Future group at MIT. “We see that as a flaw.”

Current lithium-ion battery packs are estimated to cost from around $175 to $300 per kilowatt-hour. (A typical midrange EV has a 60/kWh battery pack.)

A number of commercial and academic researchers have projected that the costs of such batteries will reach $100/kWh by 2025 or before, which many proclaim is the “magic number” where EVs and gas-fueled vehicles reach retail price parity without subsidies. And they would continue to fall from there.

Historical vehicle ownership and miles traveled in the U.S., 1970-2016. Vehicle ownership has been linearly interpolated between 1970, 1975, 1980, 1985, and 1990 using data from the U.S. Bureau of Transportation Statistics (BTS) (2019). Vehicle totals for the years prior to 2007 include vehicles defined by BTS as “passenger cars and other 2-axle 4-tire vehicles”; figures for the years from 2007 onward combine vehicles defined by BTS as “light duty vehicle, long wheel base” and “light duty vehicle, short wheel base.” These categories are slightly different, so post-2007 data are not directly comparable to prior data. Graphic: MIT
Historical vehicle ownership and miles traveled in the U.S., 1970-2016. Vehicle ownership has been linearly interpolated between 1970, 1975, 1980, 1985, and 1990 using data from the U.S. Bureau of Transportation Statistics (BTS) (2019). Vehicle totals for the years prior to 2007 include vehicles defined by BTS as “passenger cars and other 2-axle 4-tire vehicles”; figures for the years from 2007 onward combine vehicles defined by BTS as “light duty vehicle, long wheel base” and “light duty vehicle, short wheel base.” These categories are slightly different, so post-2007 data are not directly comparable to prior data. Graphic: MIT

But reaching the $100 threshold by 2030 would require material costs to remain flat for the next decade, during a period when global demand for lithium-ion batteries is expected to rise sharply, MIT’s “Insights into Future Mobility” study notes. It projects that costs will likely fall only to $124 per kilowatt-hour by then. At that point, the “total cost of ownership” between the categories would be about the same, given the additional fuel and maintenance costs of gas-fueled vehicles. (Where these lines cross precisely depends heavily on local fuel costs and vehicle type, among other factors.) […]

The MIT study notes that achieving deep reductions in transportation emissions will require a parallel overhaul of the electricity systems used to charge EVs.

Currently, US carbon emissions per mile for a battery electric vehicle are on average only about 45% less than those from a gas-fueled vehicle of comparable size. That’s because fossil fuels still generate the dominant share of electricity in most markets, and the manufacturing process for EVs generates considerably higher emissions, mainly related to the battery production.

EVs in some US regions, notably including coal states like West Virginia, could generate nearly the same level of emissions as standard vehicles over their lives. In parts of India and China with particularly dirty electricity systems, EVs may even generate more emissions than gas-fueled vehicles, says Emre Gencer, a research scientist who worked on the study. [more]

Why the electric-car revolution may take a lot longer than expected

Projected vehicles and motorization in the U.S. This figure assumes that the number of non-household vehicles (commercial and government-owned fleets), which currently represent 10 percent of all light-duty vehicles in the U.S., grows at the same rate as the number of household vehicles estimated by our model. With these assumptions, total light-duty fleet size is projected to grow to 319 million vehicles by 2050. This amounts to an increase of 28% compared to 2017, or an average growth rate of 0.7% per year, which is less than half the long-term average rate of growth — of 1.9% per year — experienced between 1970 and 2017. Average levels of motorization rise more slowly, increasing 7% over the study period, from 0.77 vehicles per person in 2017 to 0.82 vehicles per person in 2050 (this translates to an average growth rate of 0.2% per year). Graphic: MIT
Projected vehicles and motorization in the U.S. This figure assumes that the number of non-household vehicles (commercial and government-owned fleets), which currently represent 10 percent of all light-duty vehicles in the U.S., grows at the same rate as the number of household vehicles estimated by our model. With these assumptions, total light-duty fleet size is projected to grow to 319 million vehicles by 2050. This amounts to an increase of 28% compared to 2017, or an average growth rate of 0.7% per year, which is less than half the long-term average rate of growth — of 1.9% per year — experienced between 1970 and 2017. Average levels of motorization rise more slowly, increasing 7% over the study period, from 0.77 vehicles per person in 2017 to 0.82 vehicles per person in 2050 (this translates to an average growth rate of 0.2% per year). Graphic: MIT

Mobility of the Future

MITEI’s three-year Mobility of the Future study explored the major factors that will affect the evolution of personal mobility through 2050. Using a scenario-based approach, the diverse study team of MIT faculty, researchers, and students examined how different factors will shape the future of personal mobility at different scales, from global and national markets to policy and mobility choices at the city and individual levels. The study team’s report, Insights into Future Mobility, presents results and findings to help stakeholders anticipate and navigate the challenges that lie ahead.

The study was organized into five main areas of inquiry, each of which focused on a particular aspect or set of influences on the future landscape for personal mobility:

  1. The potential impact of climate change policies on global fleet composition, fuel consumption, fuel prices, and economic output
  2. The outlook for vehicle ownership and travel, with a focus on the world’s two largest light-duty vehicle markets—the U.S. and China
  3. Characteristics of alternative vehicle powertrains and fuels that could affect their future market share
  4. Infrastructure considerations for charging and fueling, particularly as they affect future demand for electric and hydrogen fuel cell vehicles
  5. The future of personal mobility in urban areas, with a focus on the potentially disruptive role of autonomous vehicles and ride-hailing services
Radar plots of urban types based on identified factors. For each city we collect information on 64 urban indicators, from which we identify nine dominant factors: metro, bus rapid transit (BRT), bikeshare, development, population, sustainability, congestion, sprawl, and network density (Oke, et al. 2018). We then cluster the 331 cities on these nine factors, producing 12 unique city types Radar plots indicate normalized factor scores (from 0 to 1) averaged for all cities in each type; adapted from Oke, et al. (2018). The “Congested Boomer” type represents rapidly growing megacities with severe congestion problems and low metro availability, particularly in India; notable members are Bangalore, Mumbai, and Delhi. Graphic: MIT
Radar plots of urban types based on identified factors. For each city we collect information on 64 urban indicators, from which we identify nine dominant factors: metro, bus rapid transit (BRT), bikeshare, development, population, sustainability, congestion, sprawl, and network density (Oke, et al. 2018). We then cluster the 331 cities on these nine factors, producing 12 unique city types Radar plots indicate normalized factor scores (from 0 to 1) averaged for all cities in each type; adapted from Oke, et al. (2018). The “Congested Boomer” type represents rapidly growing megacities with severe congestion problems and low metro availability, particularly in India; notable members are Bangalore, Mumbai, and Delhi. Graphic: MIT

Motivation

Personal mobility is a central and highly valued feature of human society—indeed, mobility is essential for economies to function and for individuals to access the opportunities they need to thrive. Therefore, the benefits of the technologies and systems that have evolved to enable personal mobility on a large scale are difficult to overstate. However, even as mobility options proliferate, expanding accessibility for many, there is growing concern regarding the long-term sustainability of our transportation systems. Our current transportation systems have a substantial physical footprint, require enormous public and private investment, consume significant energy resources, are a major contributor of anthropogenic greenhouse gas emissions and local air pollutants, and impose many other negative externalities. While these issues apply to all modes, petroleum-powered private vehicles present the greatest opportunity for disruption.

As populations increase and incomes rise, global demand for personal mobility is expected to grow, which adds an urgent dimension to the daunting policy challenges of air pollution, climate change, road safety, congestion, and social exclusion. This is especially true in emerging economies that currently have relatively low levels of vehicle ownership. More than half a billion passenger vehicles could be added to the global fleet by mid-century. Light-duty vehicle travel is expected to increase by roughly 50% in the same timeframe to reach nearly 5 trillion miles per year, raising important questions about resource use, climate and pollution impacts, system capacity, and safety.

Concurrently, and partly in response to these pressures, personal mobility itself is changing. As mobility technologies and services, consumer preferences and behaviors, and transportation policies co-evolve over the coming decades, there is great uncertainty about both the pace of continued change and which mobility options will be adopted. A few things, however, are certain: as the world’s population grows and becomes wealthier, the demand for personal mobility, convenience, and flexibility will increase. As the world urbanizes, mobility solutions will need to become more compatible with the density of activities concentrated in cities. As the world responds to environmental concerns, powertrains and fuels must evolve to become more sustainable. And as disruptive technologies and business models develop, some conventional lifestyles regarding car-ownership, shopping, and commuting may yield to the shared economy, e-commerce, and telecommuting. The forces involved are complex and sometimes in conflict but they have the potential to shape a mobility landscape that looks very different from today’s. [more]

Mobility of the Future