EVs could be cheaper than carbon fuelled cars by 2030
As battery-manufacturing facilities arrive in Europe, electric vehicles could be cheaper than their combustion engine counterparts by 2030, says Bloomberg analyst Nikolas Soulopoulos. Large-scale battery-making facilities are planned in Poland, Hungary and Germany, to meet demand from major European automakers, including Renault and Volkswagen. Worldwide battery-making capacity is set to more than double from 103 GWh today to 278 GWh by 2021, BNEF says. The increase in capacity will continue to drive down costs for batteries, which make up 40% of the cost of EVs. Prices will fall by 43% by 2021, from $273/kWh today to around $156/kWh, says Bloomberg.
While Tesla gets tons of attention for its “gigafactories”—one in Nevada that will produce batteries, and another in New York that will produce solar panels—the fact is, the company has a lot of battery-building competition.

Exhibit A is a new battery plant in Kamenz, Germany, run by Accumotive. The half-billion-euro facility broke ground on Monday with a visit from German chancellor Angela Merkel and will supply batteries to its parent company, Daimler, which is betting heavily on the burgeoning electric-vehicle market.

But the lion’s share of growth is expected to be in Asia. BYD, Samsung, LG, and Panasonic (which has partnered with Tesla) are all among the world’s top battery producers, and nine of the world’s largest new battery factories are under construction in China (paywall), according to Benchmark Minerals.

That competition means the steady downward trend in battery prices is going to continue. On a per-kilowatt-hour basis, costs have fallen from $542 in 2012 to around $139 today, according to analysis by Benchmark. That makes for a huge difference in the cost of an electric car, of which 40 percent is usually down to the battery itself.

Bloomberg’s analysts have already said that the 2020s could be the decade in which electric cars take off—and one even went so far as to say that by 2030, electric cars could be cheaper than those powered by internal combustion.

Those watching the industry might worry that a flood of cheap batteries could end up hurting profitability for producers, as happened in the solar-panel business. That could happen, but India and China, two huge rising automotive markets, are bullish about using electric cars to help solve problems like traffic congestion and air pollution. So even as supply ramps up, there is likely to be plenty of demand to go around.

(Read more: Bloomberg, Fast Company, “The World’s Largest Electric-Vehicle Maker Hits a Speed Bump,” “The 2020s Could Be the Decade When Electric Cars Take Over”)