Cost of EV batteries continues to decrease sharply

It has long been accepted in the automotive world that the only thing holding back widespread adoption of electric vehicles (EVs) is the cost of their most expensive component, the battery. However, a recently-published UN-backed report, Global Trends in Renewable Energy Investment 2016, shows a sharp reduction in battery price, falling from $1k per kilowatt hour (kWh) in 2010, to $350 per kWh in 2015. For context, it has been estimated that a cost of $150 per kWh is the price required to make electric vehicles cost-competitive with petrol-fuelled vehicles.

Charging the Tesla Model S. Tesla Motors

One of the most expensive parts — if not the most expensive part — of an electric car is its battery.

So when car companies are able to make batteries cheap enough to put electric vehicles (EV) on par cost-wise with gas ones, they'll finally have a chance to mainstream.

Well, we're just about there.

Researchers estimate that once EV batteries cost $150 per kilowatt hour (kWh), they'll be cost-competitive with gas vehicles. For context, a fully-charged Tesla Model S 90D can go about 270 miles on its 85 kWh battery, according to the company.

EV batteries have dramatically dropped in price over the last five years, according to the United Nations-backed report, Global Trends in Renewable Energy Investment 2016, released March 24.

In 2010, the global average was $1,000 per kWh. By last year, it had fallen to $350 per kWh.

You can see the incredible change in this chart from the report, with a dramatic drop in cost between 2014 and 2015:

"[The cost declines] reflect improvements in battery chemistry and in manufacturing processes, economies of scale as factories get larger, and aggressive pricing by large battery makers looking to defend market share," the authors write.

You can see the effects these declines are having on electric cars coming to market today, too.

The Chevy Bolt. Aaron Brown/Tech Insider

Tesla's highly anticipated Model 3 will be priced at about $35,000. And the Chevy Bolt, expected for late 2016, will cost $30,000.

Consumers are already responding to these price drops.

In 2015, 462,000 people around the world bought electric cars, according to the report — up 59% from the year before.

If batteries keep decreasing in price at this rate, a report from Argonne National Laboratory predicts that electric cars will make up 58% of the light vehicle market by 2030. And by then, non-hybrid gas cars will comprise less than one-fourth of the market.

Hopefully in the next decade or so we'll adopt even more renewable energy to charge these cars with, so they can displace even more carbon emissions than they already do.

Right now, electric cars are on the verge of going mainstream. Charging stations are proliferating (though not yet quickly enough). As EV batteries keep dropping in price and electric cars get cheaper, more and more people will decide an electric car is the choice for them — so we'd better build out the infrastructure needed to keep them charged.