A research team at the Massachusetts Institute of Technology (MIT) has taken a deep dive look into lithium-ion battery costs. Grab your wetsuit and gear — we’re about to join them. To start with, Twitter user @facts_tesla shared a thread detailing some of the key findings of that study.
The study, “Re-examining rates of lithium-ion battery technology improvement and cost decline,” published in the journal Energy and Environmental Science, shared new findings identified by MIT postdoc Micah Ziegler and Associate Professor Jessika Trancik. They found that the real price of lithium-ion battery cells, relative to their energy capacity, has declined about 97% since their commercial introduction in 1991.
Think about that for a moment. Technology has drastically changed our world since then, but not many people take into consideration the impact of lithium-ion batteries that power today’s mobile devices, laptops, and electric vehicles.
The study estimated that the price per energy capacity declined 13% per year between 1992 and 2016. The study noted that when the cumulative market size doubled, the price per energy capacity decreased by 20% for all types of cells and 24% for cylindrical cells.
The report also noted “robust estimates of the rate of advancement of lithium-ion technologies versus various possible determinants.” It found that while the prices for both cylindrical cells and other types of cells declined with time in a similar manner, there was a higher learning rate observed for cylindrical cells.
In an interview with SciTech Daily, Professor Trancik made one other important note: “we saw that there was substantial disagreement as to how quickly the costs of these technologies had come down.”
The article noted that it was common knowledge that the decline in battery costs was an enabler for the recent growth in EV sales, but that it wasn’t clear just how much of an impact that decline had on the market. Through the detailed analysis, Professor Trancik said, “we were able to confirm that yes, lithium-ion battery technologies have improved in terms of their costs, at rates that are comparable to solar energy technology, and specifically photovoltaic modules, which are often held up as kind of the gold standard in clean energy innovation.”
Ziegler also gave an interview and pointed out that the new findings weren’t just a matter of retracing the history of battery development, but also helping to guide the future. One thing he found after analyzing all of the published literature that covered the cost reductions in lithium-ion cells was “very different measures of the historical improvement. And across a variety of different papers, researchers were using these trends to make suggestions about how to further reduce costs of lithium-ion technologies or when they might meet cost targets.” The underlying data varied so greatly that “the recommendations that the researchers were making could be quite different.” You can read the full interview here.
One thing that wasn’t mentioned in the study as @facts_tesla noted was that the improved battery life will further reduce overall lifetime costs as battery cycle life increases. The result — for EV owners — is a lower price per mile. For battery storage, it’s a lower cost per kWh.