
A Behind the Scenes Take on Lithium-Ion Battery Prices - jseliger
https://about.bnef.com/blog/behind-scenes-take-lithium-ion-battery-prices/?sf99535078=1
======
saidajigumi
I really love this quote from the end of the article:

 _There is also a legitimate debate about whether or not experience curves
inherently capture technological step-changes. Put simply, something that
looks like a future breakthrough today might end up simply being another point
on the curve, by the time it is developed and engineered into a viable product
and brought to market in a decade’s time._

Sometimes this is definitely not the case, e.g. the Moore's-law-like curve of
network speed improvements[1] tend to occur in steps, related to the need to
upgrade both infrastructure and the endpoints to achieve a new speed tier.

[1] pick your domain: LAN, WiFi, cellular

~~~
Dylan16807
The wireless techs usually have a lot of refinement over time, so that the
real-world speed you get for a price is a lot smoother than a step function on
revisions. LAN tech is isolated enough that each link upgrades in a step
function, but bigger paths are a function of the price of multiple links and
also smooth out.

------
pmuk
It'll be great when these battery cost reductions filter through to home
batteries. At the moment a Tesla Powerwall 2.0 costs $6,700 for 13.5 kWh, so
$496/kWh, which is doesn't work as a financial investment.

We've got a solar installation and so I have been considering getting a
battery for either off peak to peak cost arbitration, or capturing excess
solar energy for use at night.

In the UK a Powerwall costs around £9,000 to £11,000 including additional
hardware, taxes and installation. Based on some estimates (see below), at
current prices I think you would be lucky to get a third of that back through
energy bill savings.

If the Powerwall sold at closer to its battery pack cost, it might be worth
considering.

Off peak to peak arbitration

    
    
      Peak cost of energy (£ per KWh) - £0.1573 
      Off peak cost of energy (£ per KWh) - £0.0815 
      Saving per KWh - £0.0758 
      Powerall 2 - maximum lifetime throughput - non solar uses (KWh) -  37800 [1]
      Lifetime power bill saving £2,865.62
    

Solar PV energy capture

    
    
      PV System Size (KWp) - 5.76 
      Solar irradiation - 986 
      Annual yield (KWh) - 5679 
      Annual energy exported to grid - assume 70% - 3976 
      Annual proportion that could be captured - estimate 50% - 1988 [2]
      Peak cost of energy (£ per KWh) - £0.1573 
      Annual saving - £312.66 [3]
      Warrant Period (years) - 10 
      Total saving over warranty period - £3,126.57
    

[1]
[https://www.tesla.com/sites/default/files/pdfs/powerwall/pow...](https://www.tesla.com/sites/default/files/pdfs/powerwall/powerwall_2_ac_warranty_europe_1-5_english.pdf)

[2] In winter months, all solar energy could be captured, but in summer the
panels will produce more than the Powerwall is able to store.

[3] Doesn't factory in degradation over the period, which Tesla quotes at 80%
capacity after 10 years

~~~
WhitneyLand
What prevents cheap home lithium power?

It seems easier for powerwall derivitives to become cheaper than solar because
the % total cost of ownership not attributable to batteries is less. For
example, it may not require a bunch of people on your roof, maybe less permit
or zoning related costs, maybe less electrician labor, etc.

Why couldn't a startup with a couple of EE's design something comparable or
maybe even something with ease of installation innovations using commodity
battery cells? Couldn't they buy cells in small batches online at first,
paying notch or two higher than wholesale until they ramp up sales? Not sure
how it couldn't start as a garage business for a clever engineer undergraduate
and a clever sales/marketing/distribution person.

I mean, people are already rolling their own as side projects right (without
going into the practicality or safety of that, just in reference to the
barriers to entry)?

~~~
pjc50
The cells themselves are the expensive bit. There have been one or two people
doing it as recreational projects but obviously Tesla's vertical integration
and large production run will win over the garage tinkerer.

Not to mention that selling an unsafe product is a non starter.

No, the interesting thing to me is why everyone forgot about the other
chemistries like NiFe, which are cheaper but heavier - matters less for a
fixed installation.

Also I feel that proper net metering should be better than domestic batteries
for the normal case. The only reason it isn't is regulatory spinelessness.

~~~
Tuna-Fish
> The only reason it isn't is regulatory spinelessness.

The reason it isn't widely used is because it is an absolutely terrible idea.
The value of home solar fed to the grid is almost everywhere negative to the
utility. (They need to maintain fixed capacity to meet worst case demand,
constant power sources are cheaper than adjustable ones, and it costs money to
bleed off excess power when there is not enough demand for it.)

If you force them to pay you for your useless solar excess, they just have to
raise the prices on everyone. This makes home solar more attractive, resulting
in even larger useless peak production, and higher electricity prices. It gets
even worse if the power transmission isn't decoupled from production.

A form that would make sense is instead to allow customers to sell electricity
back to the utility at the current short term spot price. As excess production
would drive that price to be negative, it would limit installation to the
level that is healthy to the grid.

~~~
pjc50
> The value of home solar fed to the grid is almost everywhere negative to the
> utility

[citation needed]

Also, being of negative value to the utility is not the same as negative value
to society! Is it displacing carbon-based generation? Is it reducing the need
to buildout power lines?

> costs money to bleed off excess power when there is not enough demand for it

This doesn't happen during the day. Very occasionally some wind farms get
curtailment payments at 3am or similar. There are no giant resistor banks to
dump energy.

> force them to pay you for your useless solar excess, they just have to raise
> the prices on everyone

Economics 101: producing more of a product makes it more expensive! No, wait,
the other thing.

> constant power sources are cheaper than adjustable ones

Be specific: nuclear (no longer really being built, surprisingly expensive) or
coal (phasing out)?

In the UK it mostly displaces dispatchable CCGT:
[https://www.gridwatch.templar.co.uk/](https://www.gridwatch.templar.co.uk/)

(Some of these problems _might_ appear at 10x the current solar market
penetration, but most of them are just anticompetitive complaints by utilities
because solar shows up as negative demand)

------
aidenn0
Interesting that we are already well below the predicted cost per kWh of one
report[1] from 2012 that projected a price of EUR250 in 2020; according to the
bnef article that price was crossed between 2016 and 2017. The 2012 article
used a 14% rather than 18% reduction per doubling of capacity that the BNEF
article is using.

1:
[https://www.researchgate.net/publication/225025651_Competiti...](https://www.researchgate.net/publication/225025651_Competitive_Cost_Analysis_of_Alternative_Powertrain_Technologies)

------
alphakilo
Although the price may be getting lower, I was lucky enough to hear a
presentation from the head of Automotive Engineering at the University of
Windsor. The professor conveyed that there are many other issues for power
storage such as a limited amounts of cobalt and difficulty in retrieving it.

I inquired about what is likely to happen as cobalt is a relatively scarce
resource if we are looking to use it for powering our world. He said he is
sure that they [researchers] will find some substitute, but right now there is
none.

As the scarcity of other elements in power storage increase, it may drive up
the prices, even if the lithium itself can be sourced.

~~~
pkulak
Is cobalt really that rare, or are there just not a lot of mines right now
because it hasn't been valuable before? The price of cobalt can triple and it
won't add much to battery prices, since it's not that much of the pack. That
price, however, will sure make building more mines a good idea.

~~~
floatrock
In the oil industry whenever someone says we'll run out of supply, they're
shot down by people saying "we'll discover new oilfields or technology will
unlock previously inaccessible ones."

Funny how that blind faith in "market prices will figure it out" never applies
to renewables.

~~~
vajrabum
It's not entirely blind as is demonstrated by the price history and the
similar histories of semiconductor and solar cell prices. That isn't to say
that there can't be price shocks or material shortages, but there are quite a
few politically and economically motivated naysayers.

------
fizixer
You can buy Samsung INR18650-30Q (top of the line) off aliexpress in bulk for
about $3 a piece. It's about 11 Wh.

You'd need 90 of these batteries to make a 1kWh pack, costing $270. Obviously
this does not include casing, assembly, and BMS (battery management system),
but that's an inexpensive (probably 10%) overhead.

Buying in "super bulk" and "from alibaba" would probably be even cheaper, and
would probably approach $176/kWh.

edit: Check out Jehu Garcia on youtube if interested (no affiliation).

~~~
Vintila
Is there anyway to confirm they are legit Samsung cells? Batteries seem too
ripe for counterfeits.

~~~
fizixer
Two options:

\- Sort by orders. If seller has sold the most, probably a reliable seller.

\- Buy a handful (or samples) first (you can ask seller that you need samples
first), and test their capacity (using e.g., a good charger, I have Zanflare
C4). The model I mentioned should have 3Ah (or 3000Ah). If confirmed, those
are legit cells.

~~~
Scoundreller
Plus the first order is the least likely to contain bad cells because you’re
doing QA.

------
tonyedgecombe
>$62/kWh by 2030

I seem to remember reading that $100/kWh is the point where electric cars are
cheaper to manufacture than traditional ICE cars.

~~~
jsight
I've heard the $100/KWh number regularly, but I think it only applies to
certain products. For a large sedan, that is still $10k of the manufacturing
cost. For smaller cars (Model 3 sized), 5-6K. That is still going to be a
substantial price hike, IMO.

~~~
cuban-frisbee
There is probably some savings in not having to put in a transmission, much of
the fluid system, electric motor might be cheaper. this is a little old [1]
but it shows that the drivetrain is cheaper on a BEV compared to ICE. They
probably haven't achieved all the savings possible yet, as model 3 is the only
massmarket vehicle and it is decidedly more towards luxury with an impressive
engine. When the big manufacturars starts to pump no frill BEVs into the
market, we might see some optimization here.

[1]
[https://www.researchgate.net/publication/260339436_An_Overvi...](https://www.researchgate.net/publication/260339436_An_Overview_of_Costs_for_Vehicle_Components_Fuels_and_Greenhouse_Gas_Emissions)

~~~
MagicPropmaker
> as model 3 is the only massmarket vehicle

Chevy Bolt

~~~
Obi_Juan_Kenobi
Bolt has been around 5,000 units per quarter, starting to close in on 10,000.

That's simply not mass market.

------
11thEarlOfMar
"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."

Would very much like to know the assumptions and factors for the demand
forecast. Will manufacturers keep up, or will there be under-supply, either of
the batteries or any of the key components? Will the pricing of different
battery technologies transpire at markedly different rates?

------
nkingsy
Now I'm annoyed that a high quality beefy 1.6kw ebike battery costs $900
shipped.

~~~
driverdan
That must be with a small motor (500W or less). I can't find a decent ebike
with a 750W+ motor for under $1200.

~~~
xxpor
750W is the legal limit in the US, so the market for anything over that will
be relatively small.

~~~
driverdan
That's only partially true. The 750W limit applies to what you call an ebike
as a seller, not your ability to sell it. Many companies ignore that law since
it's not strictly enforced.

------
pier25
So will lithium batteries be able to scale to over 1 billion cars today in the
world and other vehicles (trucks, buses, etc)?

What about the homes of almost 8 billion humans?

Will we go from peak oil to peak lithium?

~~~
sxates
Will steel production be able to scale to 1 billion cars? Or Rubber? Leather?

Maybe today's production levels don't support the wholesale replacement of
every vehicle on the road over night, but there's no shortage of lithium in
the world. It's just a matter of the market encouraging greater production,
which will ramp up as demand for batteries increases.

~~~
behringer
With driverless cars coming our need for everyone to have at least one car
will completely go away. I'm guessing we'd be looking at one car per family
living in the same town!

------
atomical
Are the batteries being charged in the graphic at the top of the page? Where
is it from?

------
cft
I bought lithium stocks in 2017 and it has been an investment disaster.

~~~
WhompingWindows
Which stocks and why? Lithium is extremely plentiful, IIRC, and my impression
is production could be easily ramped up, unlike Cobalt which is mostly from a
handful of mines in the DRC.

~~~
i_am_nomad
Which leads to another interesting question, why is cobalt (or anything else)
heterogeneously distrubuted in the earth’s crust? The answer is probably too
long to explore here, but if anyone has a tldr, I’m listening.

~~~
philipkglass
Largest factor: the abundance of liquid water and associated chemical effects.
Second largest factor: the existence of living organisms that also alter the
chemical environment.

For example, lead sulfide is nigh-insoluble in water, so where water
containing dissolved lead meets water containing dissolved sulfide, a
concentrated ore body of lead sulfide (galena) can form. Sulfate anions are
more common in Earth's natural waters than sulfide anions, but so-called
sulfur reducing bacteria convert sulfate into sulfide as part of their
respiratory cycle. That's an example of the biological contribution to ore
body formation.

As an element in Earth's crust, lead is actually _rarer_ than so-called rare
earth elements like neodymium. But neodymium's aqueous chemistry doesn't offer
such common opportunities for concentration as lead, so in practice useful ore
bodies of lead are much more common than those of neodymium.

The lack of liquid water on other celestial bodies is why they don't form ore
bodies like on Earth. On the Moon and Mercury, for example, one would expect
to find no economically exploitable deposits of either lead or neodymium.

------
WhitneyLand
tldr anyone?

are there game changing inflection points likely within 5 years or is the key
take away prices continue to fall fast?

~~~
Obi_Juan_Kenobi
It's a fairly short and information-dense article. Just go read it.

Solid-state would be a game-changer, but mid- to late-2020s is about when that
would come about.

~~~
WhitneyLand
>>just go read it.

Uh...no?

\- There's nothing wrong with suggesting a tldr/summary post. You hear some
here say they'd prefer every article had one.

\- It's doesn't leach or degrade site comment quality. At least not if common
sense is used to ask sparsely, and keep one's contribution to request ratio >
1.

\- It can provide real benefit to the community. When was the last year one
person could absorb the sum of all human knowledge, 17th century, or earlier?

I along with plenty of others most often _do_ "just go read" the article here
if it seems interesting. Plus a metric crap ton more from other sources.
There's just not enough hours in the day. It's humanly impossible to fully
read merely the subset of content that seems interesting.

None of that withstanding, thank you for adding the one liner sentence about
the article in question. No sarcasm. I consider that beneficial in the same
spirit, and it was appreciated.

The main point is concepts analogous to RTFM may have validity in certain
contexts, but I don't believe HN is the best possible fit you could find for
them.

------
nightfly
I really hope hydrogen fuel cells take over at some point.

~~~
sasoon
They will not, whole process from water to hydrogen to fuel cell to
electricity is very inefficient. You only get 1/3 of input energy back (if you
use 100kWh to make hydrogen, you get back from the fuel cell 35kWh)

~~~
DuskStar
Not to mention hydrogen is a massive pain to store, to transport, and to
convert to electricity.

Hydrogen fuel cells aren't ever going to happen. [0] Power to weight sucks,
energy to weight sucks, and safety sucks among other things. The supposed
advantages over electric cars (infrastructure, range, refueling, longevity)
don't exist, and at current rates of tech development won't ever exist. But
the disadvantages (complexity, hydrogen storage, inefficiency) still do.

0: [https://ssj3gohan.tweakblogs.net/blog/11470/why-fuel-cell-
ca...](https://ssj3gohan.tweakblogs.net/blog/11470/why-fuel-cell-cars-dont-
work-part-1)

