Oversupply of EV Batteries to Cause Prices to Plummet

Bloomberg New Energy Finance (BNEF) predicts that an oversupply of lithium-ion batteries by 2013 will cause battery prices to plummet. Overall they expect supply to outstrip demand by almost 100% as early as 2013. Electric vehicle (EV) battery manufacturers can currently produce 2.4GWh of battery power annually but this will skyrocket over 1000% to 35 GWh in only two years. Demand from EV makers however will be only about 18 GWh by 2013.

Currently EV batteries cost about $800/kWh, but this could fall to as low as just $350/kWh by 2020. Since the batteries make up almost half the cost of the car, EV prices are also expected to drop significantly.