Trajectories for Lithium‐Ion Battery Cost Production: Can Metal Prices Hamper the Deployment of Lithium‐Ion Batteries?

Abstract

AbstractCost‐savings in lithium‐ion battery production are crucial for promoting widespread adoption of Battery Electric Vehicles and achieving cost‐parity with internal combustion engines. This study presents a comprehensive analysis of projected production costs for lithium‐ion batteries by 2030, focusing on essential metals. It explores the complex interplay of factors, including economies of scale, R&D innovations, market dynamics, and metal price trends. The findings highlight the significant role of R&D innovations and economies of scale in substantial cost reductions by 2030, with projected ranges of 21–28 % and 25–37 %, respectively. However, potential cost escalations due to elevated metal prices, particularly for nickel‐cobalt‐containing chemistries, are also cautioned. To address these challenges, the study proposes a strategic shift towards robust Lithium‐Iron‐Phosphate (LFP) chemistry to mitigate cost pressures and meet predefined cost targets. Moreover, by analyzing medium or low metal price trends, the study reveals the potential for significant cost savings, with exceptional scenarios demonstrating up to a remarkable 65 % reduction in costs. Given the broad range of cost likelihoods, the study underscores the importance of vertical integration and international cooperation in managing the essential metals supply chain securely. The research has profound implications for policymakers and industry decision‐makers, providing valuable insights into the lithium‐ion battery industry.