Study: Cost and technology make electric cars unlikely by 2020

Jan. 7, 2010

Without a breakthrough in battery technology, electric-car battery costs will likely curb widespread adoption of fully electric vehicles, according to a study release_notesd Thursday by the Boston Consulting Group (BCG).

Still, the market for electric-car batteries will increase steadily, and by 2020, 26 percent of cars manufactured will have electric or hybrid power trains, according to the study.

The long-term cost target used by many carmakers--$250 per kilowatt-hour (kWh)--is unlikely to be achieved unless there is a major breakthrough in battery chemistry, according to the study. That breakthrough will have to substantially increase the energy a battery can store without increasing the cost of battery materials or the manufacturing process.

"Given current technology options, we see substantial challenges to achieving this goal by 2020," said Xavier Mosquet, leader of BCG's global automotive practice and coauthor of the study. "The reality is electric-car batteries are both too expensive and too technologically limited for this to happen in the foreseeable future."

Other challenges facing the electric-car battery market are energy storage capacity, charging time and infrastructure needs. BCG believes batteries will continue to limit the driving range of fully electric vehicles to 250-300 kilometers between charges. Fully electric vehicles that can travel 500 kilometers on a single charge and have the ability to recharge in a matter of minutes are unlikely to be available for the mass market by 2020.

Despite challenges, the study projects steady growth for electric cars and batteries. BCG estimates that 26 percent of the new cars sold in 2020 in the major developed markets--approximately 14 million cars--will have electric or hybrid power trains. BCG projects that 1.5 million will be fully electric, 1.5 million will be range extenders and 11 million will be a mix of hybrids.

The market for electric-car batteries will reach $25 billion, according to the study.

"This burgeoning market will be about triple the size of today's entire lithium-ion-battery market for consumer applications such as laptop computers and cell phones,” Mosquet said.

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