New study on cheaper plug-in battery prices: Now to 2025

Lithium battery prices should decline significantly through 2025, but that still probably won't be enough to mainstream plug-ins.

Much cheaper Volt battery packs by 2025

Is plug-in success more dependent upon psychology than technology?

After reading the details of a new McKinsey study on lithium-ion battery costs from now through 2025 that forecasts dramatically lower lithium battery prices, I asked Should America go all in plug-in cars on Soultek.com this morning.

So, should America go all in on plug-ins?

Because of manufacturing improvements, better materials, etc. McKinsey finds that battery pack costs should decline from $500 to $600 per kWh today to about $200 by 2020 and $160 by 2025.

Sounds great, right?

Yet, the AutomotiveNews suggests that would reduce Chevy Volt battery costs from $8,000 today, to $2,560 in 2025 — a number not even big enough to replace the current federal tax credit for the Chevy Volt.

Sure, GM and other automakers will find additional ways of reducing costs on plug-in vehicles like the Volt, such as better battery management systems. Consequently, coupled with these battery cost forecasts, maybe GM can offer a Volt in 2025 that’s a couple thousand less than a Volt today after tax credits.

Would that be enough to make plug-ins THE mainstream solution?

Based on today’s sales numbers it seems a little difficult to make that claim. Of course, add much higher gasoline prices and, maybe.

Certainly, plug-ins will get cheaper and more cost-competitive, especially for those willing to think a few years down the road — something most Americans seem to have a hard time doing.

But, are the costs projected by this study enough for the US to bet the farm on plug-ins? Or does this study prove that a battery technology beyond lithium-ion will be required to mainstream plug-ins?

Or, is the real impediment to the plug-in revolution purely psychological?

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