Electric vehicle battery prices are falling faster than expected

https://www.goldmansachs.com/intelligence/pages/electric-vehicle-battery-prices-falling.html

by dakna • 3 years ago

565 427 3 years ago

goldmansachs.com

olddustytrail• 3 years ago

Look at that chart. "40% by 2025 (from 2022)". That's pretty impressive.

SoftTalker3• 3 years ago

Looks like I'll be waiting until at least 2035 to consider an EV or home solar system.

thebruce87m2• 3 years ago

Why wait? You can get good deals on the second hand market now.

MostlyStable3• 3 years ago

So this is going to depend a lot on your driving habits, the cost of fuel in your area, the cost of electricity, and what kind of car you want/need, but I bought a new car earlier this year and the combination of those factors meant that an EV was cheaper than all comparable ICE vehicles (admittedly the EV was slightly smaller than we wanted and similar ICE vehicles would have better matched the size we wanted).

The main thing is that the cost of fuel vs. the cost of electricity meant that we are saving ~$100/month and the difference in car payments for ICE vehicles vs EV was smaller than that.

Although I'm pretty sure this only holds for new vs. new. The "used" market for EVs is almost non-existent and the savings you get is not nearly as large in used as it is for ICE. So if you are willing to buy used, then yes, ICE is still going to have an advantage for a while. But for new vehicles at least, modulo all those factors up above, it's already the case that some EVs are cheaper than comparable ICE vehicles.

skhameneh2• 3 years ago

I would recommend getting quotes for solar from EnergySage and consider going without a battery.

Incentives and prices will vary over time. While there is new "tech" for solar in the pipeline, it will take time to reach market. As prices decrease, incentives will as well. Be mindful of how incentives and financing may stack, EnergySage will provide all the info you need to make an informed decision.

marssaxman2• 3 years ago

I can understand waiting on an EV, but why wait on solar? An EPA subsidized "energy efficiency" loan will cover the cost of the installation, with a payment lower than your power bill. You save money immediately and break even in ~7 years.

I had solar panels installed a little over ten years ago, for environmental reasons, and I was surprised to learn that the economics were already good enough to make it work out as a benefit in purely financial terms. Equipment has only gotten better since then.

resolutebat2• 3 years ago

The article mentions lower cost of raw materials, but the other factor driving this is more efficient batteries. CATL is starting mass production of 500 Wh/kg batteries, about twice as dense as the ones used today, which reduces the need for rare materials as well.

cogman107• 3 years ago

The other two things that are happening.

* LFPs are really starting to take off which pull a lot of pressure off higher capacity NMC batteries.

* Sodium ion batteries are just starting to hit the market which further reduce demands on Lithium.

The ramp up on alternative chemistries is playing a fairly good role here and sodium ion will likely push prices down even more aggressively.

Further, I expect that battery recycling will really start to be a major contributor to lower costs in the next 10 years or so. So I'd expect even lower prices as the battery market starts approaching saturation.

paddy_m• 3 years ago

You seem to know a lot about battery tech. What do you read to keep up to date?

solarkraft2• 3 years ago

Is recycling even economical today? Won't it become less so as new batteries become cheaper?

jillesvangurp2• 3 years ago

I don't know about mass producing those. But they are definitely starting low volume production of those for the aviation industry.

For cars, they are pushing lfp and sodium ion as perfectly reasonable & cheap batteries.

resolutebat2• 3 years ago

In addition, we will also launch the automotive-grade version of condensed batteries, which are expected to be put into mass production within this year.

https://www.catl.com/en/news/6015.html

jandrese3• 3 years ago

This is exactly what we would expect to happen. There was a major supply crunch for batteries which incentivized people to build more battery factories which caused a projected crunch in the mining sector, but the mining sector saw the writing on the wall and started ramping production too.

Now the battery costs are falling and in a few years we will probably see an oversupply situation which will be good times for anybody who uses batteries. I'm a bit hopeful about decarbonization efforts for the latter half of the decade. I think battery prices will drop enough to make grid storage viable in more places and further allow the deployment of wind and solar generation. As this article mentions EVs will see a major price drop in their most expensive component.

Then of course a bunch of the manufacturers will go out of business because the prices dropped too low and then the market will consolidate into a couple of companies and prices will creep upward again as they fail to compete with each other. But that's a problem for the future.

cogman107• 3 years ago

For the next 10 years, I don't think we'll see an oversupply of batteries. There's simply too many ready to deploy applications for them that will accelerate as cost comes down.

Grid storage is the major one. As price starts to decline you are going to see power providers soak up any excess battery supply.

calvinmorrison2• 3 years ago

Battery recycling is also very good. Most all car batteries are recycled. Once you have enough lithium or whatever dug up, it'll just get cheaper to recycle for the most part.

AtlasBarfed3• 3 years ago

That's not even the important stuff. CATL has 150 wh/kg sodium ion (aka a 300 mile car or better) that is 1/3 or less what cobalt chemistries cost, and LFP at 200+wh/kg (aka a 400 mile car) at about 1/2 what cobalt chemistries cost.

But the ultra dense stuff will also help as well, especially with heterogenous cell architectures and the like.

hunglee2• 3 years ago

New industries require a monopoly to create the infrastructure and standardisation to scale. Absent an Amazon or Apple-like private sector actor in EV's, it was the state which had to do it. Same goes with Small Reactor Nuclear, Solar / Wind / Wave, space exploration and the rest. Free market comes after

jjcm• 3 years ago

No surprise there. Increased demand -> increased economies of scale over time. What I'm really curious about is if a new battery with increased density heavily disrupts this. If you double density, then naively you need half the batteries / half the materials, or half the cost.

PheonixPharts• 3 years ago

Increased demand -> increased economies

With the caveat that demand is decreasing right now. [0]

0. https://www.wsj.com/business/autos/ev-makers-turn-to-discoun...

hiddencost• 3 years ago

The cycles aren't quite that tightly coupled, I think.

The current battery tech is responding to demand (and demand predictions) from a couple years ago.

thehappypm• 3 years ago

I can’t read that article, but, EV adoption is growing like crazy. They went from 6% of new car sales in Q3 2022 to 8% in Q32023. I suspect demand is softer than expected but I am struggling to see how it is “decreasing”.

dkjaudyeqooe• 3 years ago

That's a positive market move, because EV prices have been stupidly high and out of reach for most people in the market for a car. Manufacturers need to to focus on cost and scale, the thing they are, in theory, good at. Competitive pressures should drive the industry to achieve those things.

martinpw• 3 years ago

Can't read the article but pretty sure demand is not decreasing, what is decreasing is the rate of growth. So still growing, but slower than before, which is a far different story.

wolfendin• 3 years ago

Dealers say part of the problem is that a wealthier group of early EV adopters have already purchased a vehicle. Now, the industry is confronting a more reticent group of consumers, who are already being squeezed by high interest rates and rising costs.

Seems like the cheaper batteries will solve that

Epa095• 3 years ago

You don't think they might have though about "Increased demand -> increased economies of scale over time" when they made the original prediction?

jfengel• 3 years ago

I guess it depends on who "they" were. An awful lot of the people making predictions didn't want electric vehicles to succeed, and lowballed the degree of economies of scale.

About the only one who seriously committed to it was Elon Musk and his engineers. It may have been the last sensible thing he did, but it was a doozy.

Tade02• 3 years ago

This works as long as the increases in density come from widening the range of voltages in which the battery is stable - that has happened in history with the advent of 4.35V cells (vs the previous figure of 4.2V@100% charge).

Current approaches like silicon-enriched or pure lithium metal anodes indeed use less materials, but they're decreasing the size of the less dense of the two electrodes, as the metal cathode is typically much denser and heavier than the graphite anode, so ultimately you're getting more density, but largely because you're decreasing the volume of the whole thing.

Lithium is the limiting component, since it carries the charge - there's a theoretical limit how little you can use and we're within an order of magnitude of that.

gpm• 3 years ago

I was curious about the value of the theoretical limit, googled it, and found this paper [1] with this chart [2].

[1] https://www.sciencedirect.com/science/article/abs/pii/S24058...

[2] https://ars.els-cdn.com/content/image/1-s2.0-S24058297193110...

sapiogram• 3 years ago

Headline seems to contradict the article? It's predicting that prices will fall in the future.

stavros4• 3 years ago

Yeah, but prices won't stay the same until 2025-01-01, when they'll all drop by 40% at once. It's linear, and they're dropping faster than expected.

2wrist• 3 years ago

It is interesting. I read recently that the next generation of BMW's (2026?) will have a 50% reduction on the cost of the battery. Hope it falls further.

hshsbs84848• 3 years ago

“Goldman Sachs Research estimates the EV market could achieve cost parity, without subsidies, with internal combustion engine (ICE) vehicles around the middle of this decade”

That would be quite the milestone

I’m curious at what point it will flip and EVs become cheaper than ICE

aaomidi2• 3 years ago

I feel like once the cost drops, it will be just in maintenance alone.

cfeduke• 3 years ago

it will be just in maintenance alone

Can confirm; >5 years on a Model 3 and other than tires $0 in maintenance so far. >3 years on a Model Y and other than tires, $0 in maintenance so far. Absolute huge cost and time savings compared to my ICE vehicles, even when I perform my own maintenance on them.

grecy3• 3 years ago

I’m curious at what point it will flip and EVs become cheaper than ICE

If Tesla can pull off some of the manufacturing efficiencies and improvements they talked about at their last investor day, it seems very likely their up coming "smaller" vehicle will be exactly that.

Animats2• 3 years ago

Shortly after 2025, apparently.

And this can keep going.

A big pending change: if the solid state battery with 10 minute charge time works, gas stations can become charging stations. Pull out the pumps and tanks, put in the chargers, keep the islands and the convenience store. Charging stations now look like gas stations, not parking lots. Transitioning to BEV does not require new real estate.

By 2030-2035, people with gas cars will be looking at maps to find open gas stations.

throitallaway2• 3 years ago

By 2030-2035, people with gas cars will be looking at maps to find open gas stations.

That's a wild statement. Not everyone replaces their vehicles every year. Some people drive a car for 10-20 (+) years before ditching it. There will assuredly still be plenty of open gas stations in 2035.

cogman107• 3 years ago

Pull out the pumps and tanks, put in the chargers, keep the islands and the convenience store. Charging stations now look like gas stations, not parking lots. Transitioning to BEV does not require new real estate.

You really don't need to even do that. You can put a charger at every parking lot in front of the convenience store (Already happening in a few locations around me).

But also, most charging (at least early on) will be happening at home. There really is no need to convert every gas station into a charging station. We just need major throughways covered. The one missing piece is L2 chargers, We need more of those installed in more locations. For example, employers could easily put them in office parking lots. With 8 hours to charge, you could even do L1 chargers.

WD40forRust342• 3 years ago

By 2030-2035, people with gas cars will be looking at maps to find open gas stations.

I'm already doing that now for true Diesel #2 in SoCal with my '15 VW GSW TDI SEL. Diesel was always hit-and-miss being at about a third of stations, but now it seems like two-thirds of the stations which had Diesel #2 converted to some B20-B50 variant or even R99.

I wonder how many diesel fuel systems are getting absolutely pwned by ignorant owners putting high(er) biodiesel content fuel in contact with gaskets which will swell and fail once the owners switch back to Diesel #2...

smileysteve8• 3 years ago

I think that gas stations will be harder to find sooner; 95% of the time, 70% of ev owners will charge at home, where the daily average commute is possible to charge on a 129v circuit.

With adoption already at 5%, that's a serious threat to gas station visits; imagine 10% fewer people stopping at a gas station a given week, or 20%. And this doesn't only apply to bevs, but to a smaller degree phevs too.

Service centers (fewer oil, brakes, coolant changes), dealerships (because engine and transmission failure decreases), and eventually auto parts stores will also see this volume of customers decrease.

Getting to 2030 is going to be wild.

michpoch• 3 years ago

It is a bit less of a milestone considering how inflated ICE prices became.

Once they normalise EV prices will be still really far off.

rafaelmn• 3 years ago

What makes you think they will drop ?

r00fus• 3 years ago

Some Teslas are already cheaper than the median vehicle cost.

freshfunk• 3 years ago

Generally this is unlikely the happen (obviously will depend on which EV and which ICE). The reason being is that consumers have generally accepted the cost for cars at a certain level. Rather than dropping the price for cars, they add more features or improve quality to justify a certain price point.

The average ICE engine hasn't changed, from a technology standpoint, has not changed in decades. What's changed is all the internal technology (entertainment systems, parking cameras) as well as trim that's become standard (power everything). These standards are defined by the market. Case in point: see what the standard for cars (both quality and price) are for a given market like US vs India.

It's unlikely they will lower margins so much as to make less money from EV's than from ICE cars. An analogous model are iPhones. The old iPhones could be sold today at a fraction of the price but instead they release new models with better features to justify the higher price point.

(This is all with a caveat that I'm talking about sticker price. Given that EV maintenance should generally be cheaper, without a doubt the target is to have the total cost of ownership be lower than an ICE car as that's how EV's are being positioned today.)

nicoburns6• 3 years ago

The traditional manufacturers might not, but EVs are lot simpler to make than ICE cars, and that might make it easier for new entrants to enter the market. At the moment that’s somewhat offset by the difficulty in and cost of procuring batteries, but once those become commodities I’d expect (some) EVs to be cheaper.

hedora• 3 years ago

I think the crossover point is pretty much here already, at least for certain models, and if you make price-sensitive decisions.

After I figured in gasoline costs and my commute in California, I worked out that my used luxury EV would save 100% of its purchase price in gasoline (even accounting for electricity costs) in something like 3-5 years.

AtlasBarfed3• 3 years ago

I'm pretty sure Tesla is already there, they are milking the profits right now though.

150 wh/kg sodium ion and 200+wh/kg LFP is going to be the workhorse of this price improvement. Sodium Ion should only be 30-40$/kwhr, and 2025-ish is when CATL expects to hit 200wh/kg sodium ion and 250 wh/kg LFP.

So its a double assault: higher density with cheaper materials. Waiting in the wings are solid state and sulfur techs among others.

IMO what is needed is a gradual phase-out EV price credit (not a tax credit) that starts at $10,000 and drops $1000 per year. Meanwhile, ICE cars should get taxed at registration $500 extra and that increases $500 per year.

oezi• 3 years ago

When will we see any consumer products utilizing sodium ion batteries at this price point? A 10kwh battery for less than 1000 USD certainly would change a lot of calculations around home solar.

lttlrck• 3 years ago

$500 a year will take a lot of perfectly functional ICE cars off the road, to what end? And it would punish lower income families.

Gas prices alone are enough stick for this transition.

jmrm• 3 years ago

Looking about how much expensive ICE cars have got isn't that difficult than 5 years ago.

hristov4• 3 years ago

This is very good news. Now I would like to see western car manufacturers lower prices of EVs in unison.

Remember how in the 90s the intel pc completely overwhelmed and completely destroyed several layers of computing competitors. Intel and their PC manufacturing bretheren did that by providing a decent quality product at the lowest price. Then they used the benefits of manufacturing scale to improve the price quality ratio to the point where the intel PCs were higher performance than even the fancy work stations that cost 10 times as much.

Well the chinese are about to do that with EVs. EVs are very similar to PCs in this respect, because they have a lot of potential for manufacturing efficiencies.

Western manufacturers (other than Tesla) should drop their prices and try to get to scale as soon as possible. Tesla is at scale but it has a bunch of other problems. Elon should stop his public stage embarrassments (latest having to do with antisemitism and neo nazis) and should concentrate on making cars people like.

3cats-in-a-coat6• 3 years ago

I believe your analogy with computers is incorrect. Prices are dropping not because of rabid competition that tries and succeeds in one-upping each other with better cheaper tech.

No, instead demand is rapidly drying up, because suddenly people realize most EVs are vastly, vastly inferior to what they were supposed to replace. The only EVs that make sense are small ones, small battery, for urban transport without the emissions, so you can keep the city air clean.

From that point on, the bigger you get, the worse it gets. Notice that although Tesla has sold several million sedan/compacts and... uhmm "SUVs" (really: just slightly bigger Model 3s), they keep postponing the CyberTruck and Semi. They've only made 90 Semis and avoiding mass production. CyberTruck also won't be in mass production for at least a year more as they test the market (expect several thousand sold).

That's because no amount of hype can hide the facts for too long. These cars are expensive to buy, but way more expensive to own. Insurance is shooting up to the sky as they have to write off entire cars over minor damage because they dented the battery and this sh*t can't be fixed.

EVs will also be increasingly a liability when parked tightly below residential buildings, malls, ferries and so on. If it catches fire, the whole parking lot is done.

The EV bubble is popping before your eyes. The future is not electric. The future is hybrid and I mean this in multiple ways. Diesel trucks, gas pickup trucks, hybrid family cars, and small electric urban cars and electric scooters.

cperciva• 3 years ago

Insurance is shooting up to the sky as they have to write off entire cars over minor damage because they dented the battery and this shit can't be fixed.

I'm hoping we'll see improvements to the designs here, e.g. modular replaceable batteries, so that if the battery is damaged in a collision there's a $1000 cost to replace one of 4 battery modules, rather than a $40000 cost to replace the entire vehicle.

sergiosgc• 3 years ago

A quick Google search, and you'd have learned that US BEV sales grew 68% in the last year. You'd have saved the embarrassment of writing a huge argument on faulty grounds.

wwtrv3• 3 years ago

they keep postponing the CyberTruck CyberTruck also won't be in mass production

I'm not sure being an EV is the biggest hurdle for manufacturing that abomination. Tesla had troubles putting plastic panels together, so steel ones might be an issue. If they actually end up trying to manufacturing it at scale they'll end up having redesign it which will lead to significant delays.

blacksmith_tb• 3 years ago

Color me skeptical - even if EVs were worse in every way (which clearly isn't true, cheaper to operate and maintain, for example, even if they're not the easiest for long road trips), we might still just have to suck it up and accept that we have to change? Most driving is short trips anyhow, so I tend to think it's just an illusion that everyone needs to be ready for an epic journey at any time - instead of yet another trip to the office or to get groceries. Just rent a diesel for the road trip?

hristov4• 3 years ago

My tesla model s is about 10 years old now and it's cost of ownership is far lower than any gasoline car I have had. These cars were expensive to buy (but getting cheaper) but are far far far cheaper to own. You can look at the article you are commenting on and see that economists are predicting that total cost of ownership of EVs will be lower than gasoline cars by 2025.

hristov4• 3 years ago

As far as the cybertruck ... this is just the stupidity elon musk has been affected by lately. The cybertruck body is supposed to be made by a fancy new method which Tesla has a lot of problems bringing to mass manufacturing. Rivian is making ev trucks and suvs that are quite popular.

hdaz0017• 3 years ago

"If it catches fire, the whole parking lot is done"

haha well Luton Airport fire was not caused by an EV !! https://www.bbc.co.uk/news/uk-england-beds-bucks-herts-67077...

The risks are going in the opposite direction with lifepo4 batteries this reduces by a large margin (( far better than petrol and diesel )), then the next step is semi-solid state batteries and then solid state.

Just no contest...

"can't be fixed" well insureance companies will need to be forced to make sure they are fixed !!! it's poor regulations that are causing this not the tech!! standard and modular replaceable batteries problem solved and this also reduces prices.

pjc504• 3 years ago

The market is fine, people are seeding "EVs are over" stories in the press for _some reason_. You know what's still an issue? Lead times. For absolutely everything with chips in it. A worse problem for EVs.

The West can only hold back value Chinese EVs for so long.

outworlder2• 3 years ago

No, instead demand is rapidly drying up, because suddenly people realize most EVs are vastly, vastly inferior to what they were supposed to replace. The only EVs that make sense are small ones, small battery, for urban transport without the emissions, so you can keep the city air clean.

Vastly inferior?

I have one of the cheapest EVs that you can buy in the US. The quick charging standard is obsolete. And yet I'd rather drive it than most gas cars. Instant torque (even with a wimpy motor that's the size of a baseball), silent operation, zero time spent at gas stations. Free charging at work means I don't pay for fuel to commute (and it's more than 50 miles each way). But even if I did pay, it would be far cheaper than gas.

These cars are expensive to buy, but way more expensive to own.

It's the cheapest car I've ever owned. I leased, then purchased after the lease. It cost about the same as an entry level Honda Civic. 4th year, $0 maintenance, other than a cabin air filter.

No oil changes, no emissions testing.

the bigger you get, the worse it gets.

That's true for all vehicles, although you do have a point with power density requirements. SUVs and 'trucks' are only viable because US gasoline is still cheap even in CA peak prices and parking is usually plentiful. Notice how they are rare worldwide.

Insurance is shooting up to the sky as they have to write off entire cars over minor damage because they dented the battery and this sh*t can't be fixed.

Insurance is fine for me. Again, non Tesla. Not all cars have the same design or have batteries that are structural - or batteries that aren't too different from laptop ones.

EVs will also be increasingly a liability when parked tightly below residential buildings, malls, ferries and so on.

Statistics are hard to come by, but you'll find some manufacturers that have a higher incidence of fires. In particular, LFP chemistries are very, very tame. Heck, Toyota still uses NIMH for their hybrids.

By the way, you contradict yourself when you say the future is hybrid, but then go on to talk about battery fires. Even small hybrid batteries store a lot of energy, enough for a pretty serious fire if they do catch on fire. So which is it?

Many of your criticisms seem to be about Tesla. Tesla does a lot of things that are questionable. Repairs tend to be very expensive, for one. The Cybertruck makes no sense and the Semi is probably not viable. That's not about "EVs" though, that's a Tesla specific thing.

jewayne7• 3 years ago

people realize most EVs are vastly, vastly inferior to what they were supposed to replace

I don't know how anyone with any knowledge of EVs whatsoever can make this argument in 2023. Maybe this was forgivable 10 years ago, but now? This feels like bad faith.

The future is hybrid

The future of personal transport vehicles is battery-electric, full stop. Why? Because you no longer need any of the trappings of an internal combustion engine. People forget why cars were awesome in the first place -- because you didn't need a horse anymore. In the same way, the big gain in the BEV is NOT adding the battery and the electric motor, it's getting rid of the ICE.

Geezus_42• 3 years ago

If the liability is the battery exploding, then how are hybrids any different? They still have the same type of battery, just smaller.

jes5199• 3 years ago

Tesla has margins on their EVs so they could afford to cut the price. The other Western manufacturers aren't there yet, so there's not sufficient competition. Maybe Chinese manufacturers will get into western markets and we'll get a real price war

pengaru2• 3 years ago

While part of me is looking forward to affordable minimalist EVs that aren't trying to be self-driving smartphones on wheels, I'm certainly not looking forward to reliving no-name chinesium smartphone knockoffs with batteries that try burn your house down the first time you forget them charging overnight...

rgmerk• 3 years ago

They're already in Europe, and there is a price war.

In response, European automakers are both innovating and pressuring governments for restrictive measures.

https://www.reuters.com/world/europe/eu-launches-anti-subsid...

YeahThisIsMe• 3 years ago

Tesla is out on account of Musk being their CEO. They've locked in for now through licensing their plug.

dilyevsky• 3 years ago

Maybe Chinese manufacturers will get into western markets

They already have - volvo makes nice evs but pretty pricey

1970-01-01• 3 years ago

That's a very fast and loose description of the 90s PC boom you've posted. I do not think it compares to EV manufacturing very much, if at all.

https://en.wikipedia.org/wiki/IBM_PC_compatible#"IBM_PC_comp...

bluedino• 3 years ago

90's PC industry, so outsource everything little by little until it's funny overseas in the means of cost savings and efficiency, and then there's nothing but scraps left here?

HPsquared2• 3 years ago

That's the way of the world.

roland35• 3 years ago

Cars have an element of safety and reliability concerns where I just do not trust some of the newer automakers, compared to a computer! Also it is different purchasing a car for tens of thousands of dollars vs a computer.

lordnacho4• 3 years ago

Aren't there safety conformance tests that every car is put through before being allowed to be sold? I seem to remember looking through these last time I bought a car.

stcredzero8• 3 years ago

Cars have an element of safety and reliability concerns

Teslas are claimed to be the safest cars ever made. In fact, Tesla uses instrumentation to track accelerations many times a second during actual crashes, and gather statistics on what gets hit, and what goes where during a crash.

This is data of a quality head and shoulders above the competitors, and it shows.

On top of that, they are using similar techniques to have the car avoid the crash altogether. These comprise active safety measures which are included with FSD, but which are also standalone and included generally in Tesla cars.

smileysteve8• 3 years ago

I just do not trust some of the newer automakers

I have little trust many of the older car manufacturers as well; GM, Chrysler, Ford seem to be 30+ years behind on shipping reliable technologies like variable valve timing or independent rear suspension. Have you seen the Ford Bronco crash test? The Kia key debacle has only recently taken over the fact that Chrysler was 20 years behind Japanese makers adding chip on key/immobilizer tech. The american makers put off tech like coil on plug, and port injection 8+ years compared to Japanese and European.

throwawaaarrgh2• 3 years ago

PC manufacturing is wildly different than car manufacturing. Building a car requires like 20 different disciplines all working in unison, perfectly. Regardless of how cheap the battery gets, it's still complicated, difficult and expensive to make a car [that doesn't suck]. So it's unlikely prices will drop significantly just because one big component gets cheaper, and "scaling" production is still very hard. Just screwing up one assembly step can cause huge costs.

dimal• 3 years ago

PC manufacturing is wildly different than car manufacturing.

I would grant that PC manufacturing is wildly different than manufacturing an internal combustion engine car, but is it wildly different making an EV car? A lot of complexity disappears once you don't have to orchestrate thousands of tiny explosions, then transmit the thrust from those explosions to multiple wheels in different areas of the car. My understanding of EVs (which is limited) is that they are much simpler.

balderdash• 3 years ago

I wouldn’t hold my breath - there is still plenty of excess demand for new cars to be worked off before auto manufacturers will need to lower prices - evidence of this is the decline in used car prices, but now where bear back to “trend” levels… https://site.manheim.com/en/services/consulting/used-vehicle...

kristopolous6• 3 years ago

People responding really don't know the state of Chinese electric right now.

For 2023, China's BYD has globally outsold Telsa by over 50% and 8 out of the top 10 brands for global electric car sales for Oct 2023 are from China.

The BYD qin plus, for instance, is about $20k, the Wuling Mini-ev is about ~$10k, Aion Y is $20k. They're eating everyone's lunch and expanding into Central America, Africa and Europe.

Cars like the Cherry QQ, which are $5,000 aren't meant to be compete with new cars but instead, to the vast majority of price-sensitive buyers who normally purchase used cars. Introduce a used-price new car, however ...

They're poised to do to the American auto market what Japan did 40 years ago and just like then, American auto seems to be asleep at the wheel.

This is a classic Clayton Christensen innovators dilemma formula.

Edit: Apparently factual statements are unpopular once again. The internet is so cool.

dalyons• 3 years ago

Do people just find these facts inconvenient? Unbelievable.

onlyrealcuzzo2• 3 years ago

The Model 3 in China is only ~$30k.

Stuff is just cheaper in China.

I highly doubt BYD could sell a car in the US for $20k.

totallywrong• 3 years ago

The BYD Qin Plus is over $30k in LATAM which makes it a luxury car for the region.

biaachmonkie• 3 years ago

Maybe it's because your numbers are wrong? BYD is certainly a massive and growing force in the auto industry and all signs point to that continuing, but their BEV sales 'only' are about equal to Tesla.

The often quoted sales figures, that you appear to be referencing, that have them way out in the lead include ICE and Hybrid cars, so if you're going to include those you're really comparing overall auto sales not BEV sales.

https://www.investors.com/news/tesla-vs-byd-2023-comparing-e...

spaceman_2020• 3 years ago

BYD is so ferociously competitive that India blocked a $1B investment from them in India because it was clear without massive protective taxation, they would run all local manufacturers out of the market.

zpeti• 3 years ago

If we can just for a second forget about Musk's politics - it's absolutely insane to think China would be dominating both the rocket and electric car industries if it wasn't for him.

(And yes, it is because of him, Blue Origin, Arianespace, and many others haven't been able to compete at the level of China, and neither have any electric car makers with BYD on a serious numbers level)

cpursley• 3 years ago

Yep, if folks want to catch up with the Chinese EV market, this is a pretty good channel - I had no idea that they were this far along:

https://www.youtube.com/@Wheelsboy

I'm really blown away with some of their exterior designs. Less so with their touch interfaces (which range from atrocious to outright dangerous).

twobitshifter• 3 years ago

The EV situation in Asia is changing rapidly, and would shock most Americans. The number of Ora Cats, BYD, and other unknown brands on the road would be surprising at first glance. When they see the interior, technology, and range of the cars is not at all cut-rate, they understand the reason why traditional manufacturers are frightened.

I read an article that said this all started with Tesla production in China needing local manufacturing to support. The Tesla way allowed Chinese brands to see what was being done and catch up almost immediately on the processes and technology. That was step 1. Step 2 was applying the better understanding of what the Asian market wants to the Tesla business model. VW was the largest Chinese manufacturer, but VW EVs have flopped and are by all measures worse than what is offered by say BYD. There was a VW anecdote about BYD having in-car karaoke and this never occurring to Germans as something people would want.

grecy3• 3 years ago

Do we know if BYD have any plans to sell vehicles in North America?

Why wouldn't they?

dangus2• 3 years ago

I’m more bearish of the idea of a major paradigm-shifting Chinese EV incursion to the US.

The US automotive market plays a completely different game than the rest of the world, with a bunch of protections and quirks that have a great potential to stifle a disruptive innovator.

First: the products themselves are regionally unique. The #1 selling vehicle in the US is the F-150, a truck that is a completely insane purchase for most of the rest of the world’s population. Japan may have disrupted the US market, but many of their vehicles they sell in big volumes are designed in America built in America sold primarily to Americans. BYD can’t sell the Qin Plus in America, they need to sell something more like the Rivian R1T. That means BYD needs a US factory to avoid the chicken tax…

Second: The US already shows high willingness to “chicken tax” EVs. All the vehicles that qualify for the EV tax credit are Ford, GM, and Tesla vehicles with high domestic part counts. The government can play this game until the cows come home giving the big 3 ample time to catch up.

So we’ve established that if you’re selling big volumes in America, you are producing cars in US factories. In that regard, China has a weak record of success. If they want to sell trucks in America they’ll probably have to have a UAW factory. The documentary “American Factory” comes to mind for me.

At best, this means that China won’t get the typical labor cost advantage that their entire export economy thrives on. What is their competitive advantage at that point?

Third: the dealer network. Operating in the US means dealing with independent dealerships often enshrined by law. Tesla had to fight an improbable battle to get to the scale it is now without independent dealerships.

Fourth: the incumbents have good tech and are high volume producers in their own right. BYD is big. You know who is bigger? Volkswagen. Toyota. GM. Ford. Even Tesla is bigger by global revenue. 17 other global automotive companies pull in more revenue than BYD, and 9 pull in more revenue than SAIC.

By the way, the “$5,000 used car killer” has been a legend for decades and will never happen in developed markets with strong safety regulations and demanding living standards. Americans literally do not buy city cars, new or used. Get back to me when the Cherry QQ more closely resembles the Ford Maverick.

tschwimmer• 3 years ago

0% chance that US lawmakers will allow low cost Chinese EVs to enter the domestic auto market. They’ll either implement protective tariffs or regulatory barriers or both.

Aside from US consumers, everyone stands to lose from cheap EVs flooding the market: oil companies, conventional domestic and import manufacturers, electric manufacturers like Tesla, dealerships, arguably even state and local governments who under current laws make less in tax revenue on electric cars.

SideburnsOfDoom3• 3 years ago

BYD ... expanding into Central America, Africa and Europe.

I saw a BYD logo on a vehicle on the roads of London UK a few days ago. I knew they were coming, and now they are arriving.

Geely is more stealthy, Electric vehicles from Geely subsidiaries (Volvo, Polestar, LEVC) have been around for years. The last, LEVC ( https://levc.com/ ), is the current London "black cab" taxi.

maguirre• 3 years ago

Genuinely curious, what central American country are they expanding to?

4b11b4• 3 years ago

Also, even though they may be able to produce the car for some low amount, infrastructure doesn't exist in those new places. They can't "just expand".

tnel77• 3 years ago

Assuming quality is good and the cars are actually safe (excellent crash test ratings, for example), I’m excited to buy one of these cars soon! I’d love an electric SUV/truck, but there’s no reality where I pay $80k. I’m interested in a $20-30k product though!

rr808• 3 years ago

Yeah the prices are dropping already

https://www.wsj.com/business/autos/are-americans-falling-out... https://www.wsj.com/business/autos/ev-makers-turn-to-discoun...

nopinsight• 3 years ago

The last chart suggests a linear growth in EV adoption even after 3-year-usage cost parity with ICE in 2025-2027 (2nd chart). This seems overly conservative. People care a lot about ongoing costs for gas and maintenance and will flip to EV as the default choice very soon after that. (This is particularly true in markets where long-distance car trips are less common.)

I predict more of an S-curve growth in EV sales. Probably >65% of new car sales by 2030, far more than the 47% in the ‘hyper adoption’ scenario in the article.

seltzered_2• 3 years ago

"Introduce a used-price new car, however ..."

This isn't necessarily true. A good case study is the Tata Nano which carried a lot of press around being the world's cheapest new car and ultimately flopped: https://www.autoweek.com/news/a1702021/tata-nano-failed-beca... . Arguably cars can be cost optimized to a point where people would rather buy a nicer used car.

tuatoru4• 3 years ago

It'll be interesting to see how the BYD Seagull and (even smaller) Chery QQ do in the next few years, then.

1. https://en.wikipedia.org/wiki/BYD_Seagull

2. https://en.wikipedia.org/wiki/Chery_QQ_Ice_Cream

AnthonyMouse• 3 years ago

Now I would like to see western car manufacturers lower prices of EVs in unison.

This is not even the interesting thing about lower battery prices. It may happen, but the interesting thing is that it enables different kinds of electric vehicles.

If the cost of the battery in itself rivals the entire price of a subcompact economy car, you obviously can't put one in a subcompact economy car and offer a competitive price in that market. So right now the electric vehicles with significant range are premium products. With cheaper batteries you could have a traditional subcompact economy car with mechanical controls etc. and an electric powertrain.

Likewise, trucks need large batteries to have adequate range while hauling loads. So this gets you to an electric version of the Ford Maverick, for example.

It doesn't just lower the price of the existing models, it allows the low-end models to exist.

HeyLaughingBoy2• 3 years ago

Right!!! I would love some more competition in the electric riding lawnmower arena, or just a choice of electric lawn/garden tractors and UTV's in general.

mdgrech23• 3 years ago

you have no idea how well protected the domestic auto industry is from foreign vehicles. people will cite Honda and Toyota but the rules were altered in a such a way to bring Toyota/Honda in and put downward pressure on the domestic industry but not kill them. Let's not forget GM went out of the business and our government bailed them out.

endisneigh• 3 years ago

I wish you could buy Chinese EVs in United States.

speedgoose3• 3 years ago

You can buy a Polestar I think.

ptr2• 3 years ago

Polestar is Swedish. https://en.m.wikipedia.org/wiki/Polestar

brockj• 3 years ago

You can buy personal EVs directly from China today (e-scooters, e-bikes, e-unicycles).

1-6• 3 years ago

I wouldn't buy a Chinese ICE vehicle (besides maybe a Wuhan-made Honda). What makes you think EVs would be any different?

AllegedAlec• 3 years ago

I too like to burn alive in a vehicle that'll disintegrate at 100kph or above.

londons_explore• 3 years ago

I am dubious of these numbers.

If I could really buy 1 kWh of cells for $130, I would expect to see them show up on eBay for not much more than that. (Or, even for less, because eBay has a lot of factory seconds, damaged goods, etc)

However, prices for new bare cells on eBay is more than double the numbers quoted in this article.

It makes me think there are market distortions going on, and the real price is differing from the advertised price.

crooked-v2• 3 years ago

Or the people getting those prices are carmakers with negotiated bulk discounts, and they don't have any reason to sell their cells on eBay.

damaged goods

A damaged battery is recycling material, not a resale item.

ARandomerDude• 3 years ago

Not total clickbait but close to it.

The article uses words like “expect”, “might”, “could”, and “hope” throughout. Look at where 2023 is on those charts: way to the left on the x-axis.

I hope batteries really do get cheaper in the future but this is optimistic prediction headlined as present-tense fact.

elzbardico3• 3 years ago

And a prediction based in a transitory problem with the market, where we have lots of inventory and production cuts. Of course the prices of the raw materials for batteries are going to fall if the demand fall. Is it an indicative of a longer term trend? No.

dns_snek• 3 years ago

Cool. Let me know when I can buy a used one for 10k and expect to drive it for another 10 years.

Tade02• 3 years ago

I can't help but wonder if that's possible with a modern ICE car.

It's not like their quality is worse - far from that. It's just that they're engineered to last a very specific engine hours figure.

maximus-decimus• 3 years ago

In Canada, it's also gonna be a rust bucket before then.

edent• 3 years ago

You can buy a 2nd hand Zoe, e-Up, or i3 for under £10k - https://www.autotrader.co.uk/car-search?advertising-location...

Will they last 10 years? Probably too early to say. Battery degradation isn't the problem people thought it would be. But anything mechanical is going to need some maintenance.

elzbardico3• 3 years ago

There's a lot of inventory right now in the industry, so there production cuts across the industry, thus lowering the demand for raw materials, decreasing their prices.

6stringmerc• 3 years ago

Doesn’t matter the engineering approach is still all wrong.

Basic transport in the NEV class is far superior and benefits with tech true innovation.

Bigger heavier more shit to break is what I see Lincoln advertise meanwhile in Texas car payment insurance gas parking tolls (sound familiar?) take a huge chunk of income. It’s dumb. Fix this first.

xbmcuser• 3 years ago

I am more interested how this is also bringing price of batteries down generally. With some chinese factories starting mass manufacturing sodium ion batteries this year. I think we are fast moving towards an electricity revolution because of how solar/wind and battery prices are falling and a lot of people have still not woken up to the fact. Cost of solar and battery is going to be half in 5 years maybe even 1/4 in 10 years. It is the similar thing as the doubling of processor speed we had for computer not as fast but similar.

switch007• 3 years ago

What does past data about car prices and car manufacturers’ responses to falling costs tell us about how manufacturers price vehicles?

elihu• 3 years ago

"Goldman Sachs Research now expects battery prices to fall to $99 per kilowatt hour (kWh) of storage capacity by 2025 — a 40% decrease from 2022 (the previous forecast was for a 33% decline). Our analysts estimate that almost half of the decline will come from declining prices of EV raw materials such as lithium, nickel, and cobalt."

It wouldn't surprise me if BYD, CATL, and Tesla were already there now. Not sure if there's public information on that though. I'd imagine they'd keep it a secret if they can.

Funny they mention nickel and cobalt, since they're not actually required. I think LFP cells are somewhere around half the EV-battery market these days.

sunshinesnacks• 3 years ago

Funny they mention nickel and cobalt, since they're not actually required. I think LFP cells are somewhere around half the EV-battery market these days.

Agreed!

wg0• 3 years ago

Same rosey picture fluff. That's Hallmark of almost any piece on fusion, self driving, AGI, VR, electric cars, electric planes and quantum computers etc. Oh, available tomorrow. Done deal.

Find me a after the market Chinese cell phone battery that lasts 24 hours or an after the market laptop battery that lasts two hours on a charge and I'll be a devotee to Chinese electric cars for whole my life.

This feel good tech utopia of endless possibilities where wind can power terra watts, sunlight can do wonders and such sells well but otherwise is irrational and non scientific. At the moment.

Problems are harder than that.

Supermancho• 3 years ago

See Peter Zeihans concise Electric Car breakdown on youtube.

Major EV Manufacturing expansion has been cancelled by automakers, including Tesla

The manufacturing costs that were propped up by cheap Chinese labor and exotics is ending.

Not enough exotics available for a long term plan to convert the US to EVs. Cost ends up driving EV prices too high for foreseeable future.

Not enough infrastructure in the US. This isnt changing anytime soon.

Money is tight and risk averse consumers avoid EVs, especially anything that isnt the current models.

fulafel3• 3 years ago

This is car-centric.

Oddly e-bike prices have continued to rise without a real correction after the covid shortage constrained supply price spike, and the used market is kept from balancing it out through very high replacement battery pricing with various vendor lock in mechanisms. (eg: https://www.statista.com/statistics/1396568/average-e-bike-p...)

kibwen2• 3 years ago

Vendor lock-in for batteries is a bad thing, but I'm pretty sure that e-bike prices would be rising regardless because demand is skyrocketing around the world.

fulafel3• 3 years ago

I think e-car shipments has been growing faster still, but they have not been getting more expensive.

Eg this says the e-bikes YoY growth has been only 10% ish and forecasted to continue that way: https://www.statista.com/statistics/1261084/global-e-bike-ma...

fma• 3 years ago

"Our analysts estimate that almost half of the decline will come from declining prices of EV raw materials..."

Is Goldman confident this is a long term trend? I didn't see in their report that the decline in price is due to permanent increased supply or increased efficient extraction etc...

mech765• 3 years ago

I know that Tesla, for example, has either reduced or eliminated Cobalt from their batteries. Changing composition can reduce material cost.

thelastgallon• 3 years ago

This is incredible news!

EVs provide the sweetest kind of demand for a grid, they are parked 23 hours a day, can charge whenever power is free and less than free. Power prices go negative 200 million times/year[1]. Batteries, Solar and Wind and still in the early stages, as volume grows, both will get a lot cheaper. Batteries add the much needed gigantic-distributed-storage-reservoir, soaking up all the excess production that is currently wasted.

An insightful comment from a HNer (don't remember who), if there is excess production we have to either move it across time or across space. Across space requires building transmission lines (costly, takes a decade). Across time is easy, we just need more EVs, everywhere.

https://en.m.wikipedia.org/wiki/File:3-Learning-curves-for-e...

(2019 article) “Batteries will fall much faster than you are forecasting.” The key determinant of our forecast is the relationship between price and volume. From the observed historical values, we calculate a learning rate of around 18%. This means that for every doubling of cumulative volume, we observe an 18% reduction in price. Based on this observation, and our battery demand forecast, we expect the price of an average battery pack to be around $94/kWh by 2024 and $62/kWh by 2030: https://about.bnef.com/blog/behind-scenes-take-lithium-ion-b...

Learning rate for Solar is 20%. According to this article (https://ourworldindata.org/learning-curve), the price declined from $106 to $0.38 per watt in these four decades. A decline of 99.6%. It looks like modules are a lot more cheaper, its now $0.14 per watt for TOPcon(28% efficiency) and $0.12 per watt for PERC (24% efficiency).

A common critique that comes up is, we don't have electricity for all the EVs. This is nonsense.

(1) Renewable energy is currently curtailed. A lot of production is wasted, because there is no demand at that time. EVs absorb all that.

(2) See the calculations here: https://news.ycombinator.com/item?id=35845334

(3) Electricity is used heavily in fossil fuel and oil production. We simply shift it to EVs. No additional demand.

(4) Right now, everyone's energy is fragmented: natural gas for cooking, water heating, boiler for heating, gas for cars and electricity. When people switch to EVs, a lot of them switch to solar, consolidating all energy, saving ~$1000/month. And also lowering consumption from the grid.

(5) We somehow found a ton of electricity everywhere for bitcoin, 127 TWh. We can definitely find electricity for EVs.

But, more importantly, EVs can replace natural gas peaker plants (the costliest part of electricity) and make some money! Powerwall owners are making $150/day: https://electrek.co/2023/07/05/tesla-electric-customers-repo.... When virtual power plants start popping up, there will be a huge rush to buy EVs. A ton of people are buying homes for 500K+ to put them up on airbnb and they barely make 100/day. Owning an EV (replacing your existing ICE) and make $100+ per day just by opting in to participate in a VPP is the very definition of passive income.

[1]https://www.bloomberg.com/news/articles/2022-08-30/trapped-r...

goodSteveramos• 3 years ago

Headline is false. The data shows virtually no change over the last 4 years and PREDICTS prices will fall 40% by 2030.

Electric vehicle battery prices are falling faster than expected

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