EVs and internal combustion engine vehicles are likely to reach sticker price parity sometime in the next decade. The timing hinges on one crucial factor: battery cost. An EV’s battery pack accounts for about a quarter of total vehicle cost, making it the most important factor in the sales price.
Battery pack prices have been falling fast. A typical EV battery pack stores 10-100 kilowatt hours (kWh) of electricity. For example, the Mitsubishi i-MIEV has a battery capacity of 16 kWh and a range of 62 miles, and the Tesla model S has a battery capacity of 100 kWh and a range of 400 miles. In 2010, the price of an EV battery pack was over $1,000 per kWh. That fell to $150 per kWh in 2019. The challenge for the automotive industry is figuring out how to drive the cost down further.