Chinese company claims that EV's will become cheaper to make then regular vehicles due to cheaper batteries

The Chinese company Envision Energy claims that it will be capable of making battery packs for less than $100 dollars per kilowatt-hour within the next two years. At this price, electric vehicles (EV) will become cheaper to make than regular cars.

Reducing costs of batteries crucial

At present, the Union of Concerned Scientists estimates it costs about $145 per kwh to manufacture automotive quality lithium-ion cells. To build them into packs for cars raises the cost to around $190 per kwh.

The reduction of battery costs was first reported in a recent Forbes article:" Envision Energy will produce batteries for $100 per kilowatt hour by 2020, the Shanghai company's founder and CEO said at Stanford University, predicting the price will drop to $50 only five years later and end the reign of the internal-combustion engine."

Earlier Stanford's Arun Majumdar, formerly a founding director of the Department of Energy's ARPA-E energy research program had opened the forum by maintaining that $100 per kwh battery packs would be obtainable in the next five to seven years. He claimed that this development would result in deep penetration of EVs throughout the world in another 15 to 20 years. However Envision CEO Lei Zhang was even more optimistic in his predictions as outlined above.

Zhang said that electric cars will be about 20 to 30 percent cheaper than a diesel and government subsidies will not be necessary. Lei said that people will change overnight with the cheaper prices.

It will take time for automakers to build cheaper batteries into their models

It could take as long as five years for car manufacturers to incorporate the batteries into packs for their new car models.

Envision buys Nissan's battery business

Envision also installs wind turbines and solar charge systems as well as energy management systems. Its batteries could be used for those businesses as well as vehicles. Envision recently bought out Nissan's battery business the Automotive Supply Corporation (AESC). Lei Zhang said of the deal: "With this strategic acquisition and collaboration, we aim to expand our activities via investment into the new company to realize the value of (Internet of Things) technology for smart transportation, (Vehicle-to-Grid), and smart city solutions."

Electric car market set to boom in coming years

While now the EV market is only about 2 percent in most places, this is expected to change dramatically within a few years.

Even by 2025 the number of EVs is to increase by a factor of ten. By 2040 EVs are expected to reach 55 percent of sales according to the latest report from Bloomberg New Energy Finance.

According to Bloomberg sales of pure EVs, excluding hybrids, are set to grow from their record 1.1 million globally in 2017 to 11 million in 2025 and 30 million by 2030. This will result in a decline in sales of gasoline and diesel cars. In the mid-2020s Bloomberg predicts that 55 percent of new cars sold worldwide will be EVs and fully a third of the cars on the road will be powered by batteries.

Previously published in Digital Journal