Strategies for reducing battery storage manufacturing costs
Reducing battery storage manufacturing costs
Imagine a world where access to battery storage is as common as smartphones are today. The dream of widespread, affordable energy storage is currently hindered by high costs associated with manufacturing batteries. To illuminate the cornerstones of these expenses, we delve into the current challenges like hefty initial investments, soaring raw material prices, and the quest for manufacturing process efficiency.
Acknowledging these challenges is pivotal, as it signifies the first step toward a sustainable energy future. Lowering the cost of battery storage manufacturing holds the key to unlocking mass adoption and integration into the global energy grid—central to our quest for clean energy. It's a critical component in the transition to a low-carbon economy.
As we embark on examining technological innovations that can streamline battery production, we'll also explore the supportive frameworks governments are putting into place. From the expansion of manufacturing capabilities to the intricate dance of supply chain management, this article will guide you through the complex yet promising landscape of reducing battery storage manufacturing costs.
Current Challenges in Battery Storage Manufacturing Costs
In today's rapidly evolving energy landscape, battery storage technologies sit at the crux of enabling clean energy transitions and mitigating our reliance on fossil fuels. However, the manufacturing of battery storage systems, particularly lithium-ion batteries, confronts significant challenges that make it difficult to bring down costs. Rising costs of key minerals like lithium, traditionally sourced at competitive prices, have recently surged due to the dual pressure of increased demand from the electric vehicle (EV) industry and market disruptions. This has put additional strain on manufacturing budgets.
For the battery industry to meet the ambitious goal of the Net Zero Emissions by 2050 Scenario, grid-scale batteries must undergo considerable growth. As a result, there's a necessity for cost reductions that surpass the typical scope of technological advancements. This involves not only improving battery technologies such as lithium iron phosphate (LFP) or experimenting with new potentials like the magnetic flow battery but also streamlining the entire production life cycle, from raw materials to the delivery of finished battery modules.
Localization efforts aim to bring battery manufacturing closer to end users in the US and Europe, potentially affecting the capital costs due to differences in operational expenses compared to Asia. While this brings strategic advantages, it could result in increased prices for battery packs owing to more expensive energy, equipment, land, and labor in these regions.
Moreover, the demand for stationary and utility-scale batteries is rising as part of broader smart grid transformations, further stretching the need for cost-effective manufacturing processes. Without tangible progress in reducing battery storage manufacturing costs, the push toward electrical energy storage systems as a mainstay for renewable energy applications could face significant headwinds.
High Initial Investment
Battery storage manufacturing bears a substantial weight in high initial investment costs. Sophisticated equipment, specialized facilities, and trained labor all entail significant expenditure. The energy required to run such operations, along with the cost of the land, adds further layers to an already heavy financial burden in regions like the US and Europe.
To alleviate these challenges, governments have introduced incentives such as the $45/kWh production tax credit under the Inflation Reduction Act in the US. This measure aims to reduce a portion of the hefty manufacturing costs. These policy interventions, alongside rigorous R&D, improvements in the manufacturing process, and scaling up production, are essential levers for enhancing battery technology and curbing costs in the forthcoming years.
However, the localization of battery manufacturing efforts in the US and Europe may contribute to an uptick in battery pack prices until these industries achieve economies of scale comparable to those in established markets. Furthermore, investors face considerable uncertainty concerning the technology's cost trajectory and market conditions for energy supply, indicating a range of possible futures for lithium-ion battery storage costs.
Raw Material Costs
One of the most volatile components of battery production costs is the price of essential raw materials such as lithium. In 2023, following a peak in 2022, the price of lithium carbonate, a key input for most lithium-ion cells, has dropped substantially by over 80%. Such fluctuations underscore the dynamic nature of energy storage costs linked to raw materials. Supply-demand imbalances in the lithium market exert additional pressure, leading to unpredictable shifts in costs for battery manufacturers.
S&P Global has flagged significant changes in the global lithium supply, predicting a surge from a 9,000-ton surplus to an impressive 95,000 tons. This shift could hint at a potential recalibration in lithium pricing, which could, in turn, influence the cost structure for battery producers. Battery manufacturers can, to some extent, mitigate these cost impacts through strategies such as vertical integration or securing bulk purchasing agreements for raw materials.
Manufacturing Process Efficiency
A key area of focus for reducing battery storage manufacturing costs lies in improving the efficiency of the manufacturing process. By ensuring precise measurements and controls in production, manufacturers can achieve higher throughput, optimize the use of raw materials, and decrease the necessity for costly re-processing. However, such enhancements often require upfront investments in state-of-the-art equipment, advanced software, and skilled human resources.
By pushing advancements that increase throughput, yield, and material efficiency, battery manufacturers can ultimately cut down overall operational costs. Nevertheless, the decision to localize manufacturing processes could lead to increased expenses due to higher costs related to energy, equipment, labor, and land, particularly in regions like the US and Europe.
Therefore, it is imperative that continued investments in R&D, process improvements, and capacity upgrades remain central to the strategy for reducing manufacturing costs. These efforts will not only yield more sophisticated and cost-effective battery cells and systems but will also ensure that the battery industry is on the right track to meet the growing demands for energy storage in a world leaning towards renewable sources.
Importance of Reducing Battery Storage Manufacturing Costs
Reducing the manufacturing costs of battery storage is crucial in paving the way for a clean energy transition. Lithium-ion batteries stand at the forefront of this shift, with applications ranging from electric vehicles to grid-scale storage systems. As the demand for batteries increases, finding ways to bring down costs without compromising battery performance becomes essential.
The operational costs of producing battery cells, modules, and systems hinge on several factors, such as the price of lithium, energy density, and cycle life. Innovations in battery technology, particularly in lithium ion and lithium iron phosphate chemistries, are driving down capital costs. However, achieving lower battery storage technology expenses involves enhancing manufacturing processes and materials efficiency.
Expanding capacity and localization of manufacturing also leads to economies of scale. This dynamic is particularly visible in regions like the US and Europe, where the battery industry is adapting to the challenges of labor and land costs. Localization can also mitigate the risk posed by fluctuating raw material prices, which is vital for maintaining a wide range and availability of batteries for stationary and utility-scale storage needs.
Consequently, reducing the costs of energy storage not only bolsters renewable energy adoption but also supports the overarching goal of phasing out fossil fuels, thereby marking a pivotal step toward a more sustainable future.
Technological Advancements in Battery Manufacturing
The battery manufacturing industry is on the cusp of significant transformation, spurred by ambitious research and development efforts in both corporate and public sectors. These technological advancements are fundamental to the mission of reducing costs and improving the utility of batteries across various applications. Over the next decade, continued investment in R&D—coupled with advanced manufacturing processes—aims to refine and optimize every link in the battery supply chain.
Key to these advancements is next-generation technologies, such as silicon and lithium metal anodes, solid-state electrolytes, and novel cathode materials, which promise to eclipse current battery performance standards while lowering manufacturing costs. Moreover, innovative cell manufacturing processes that streamline production and enhance quality control can potentially eradicate inconsistencies between electrochemical cells. These steps, when combined with precise measurement and control facilitated by advanced process control (APC), are poised to effectuate notable cost reductions and improvements.
Among the cost reductions in battery manufacturing, attention is predominantly focused on diminishing the costs of battery packs, which remain the primary cost drivers. Altering lithium-ion chemistry to reduce dependency on expensive materials like cobalt is another strategic maneuver anticipated to curtail production expenses. As such, these collective efforts target the heart of the energy storage ecosystem, striving to render these technologies economically competitive and sustainable in the long run.
Improved Battery Cell Design
Improving battery cell design is pivotal for bridging the gap between current performance metrics and the ambitious demands of future energy storage applications. By leveraging insights from the equivalent circuit model, researchers can delve into the intricacies of battery behavior, enabling them to target design enhancements with precision. A critical aspect of this process is the manufacturing environment itself, particularly the thermal processing of solid-state electrolytes. Variations in cooling rates can significantly influence ionic conductivity, a key determinant of battery efficiency. Thus, meticulous control over the thermal process and consistent cooling rates are indispensable for maintaining uniformity across all batches.
With the introduction of transformative technologies like solid-state electrolytes, silicon and lithium metal anodes, and avant-garde cathode materials, battery cell design is undergoing a revolutionary phase. The inclusion of APC in the manufacturing process mechanism is a testament to the industry's pursuit of perfection, striving to achieve uniform yield quality and diminished costs through precise control and optimization.
Automation in Manufacturing Processes
In the realm of battery production, automation heralds a new era of efficiency, accuracy, and scalability. Companies specializing in automation, such as ATS Industrial Automation, have recognized its transformative potential, particularly in the shift from concept to gigafactory production. Automation is increasingly becoming the backbone of the battery manufacturing industry, enabling producers to navigate the complexities of scaling up energy storage manufacturing.
Automation's capacity to identify improvements in processing and manufacturing not only furthers advancements in lithium and solid-state batteries but also helps manufacturers trim down costs. Its role in optimizing production processes—from raw material handling to cell assembly and testing—contributes substantially to enhancing cost-effectiveness and helping manufacturers maintain a competitive edge in an ever-growing market.
Advanced Energy Storage Materials
The evolution of energy storage materials has become a subject of intense focus, with lithium iron phosphate (LiFePO4) batteries taking center stage for grid-scale storage, largely due to their favorable cost and energy density metrics. Meanwhile, magnetic flow batteries are breaking new ground for stationary storage with their promising long-term performance and reliability.
Another game-changer is the development of sodium-sulfur (Na-S) batteries, which boast an energy capacity quadruple that of traditional lithium-ion batteries. With federal incentives from legislation such as the Inflation Reduction Act spurring the domestic production of electrode active materials and other components, the landscape for advanced energy storage materials is more fertile than ever.
Yet, despite these incentives and the relative abundance of lithium and phosphorus sources, supply chain vulnerabilities—particularly concerning graphite and other processed materials—could pose challenges for the U.S. battery industry. Addressing this shortfall is imperative to ensure a consistent and reliable supply of essential materials, which is a linchpin for advancing energy storage solutions.
Table: Key Technological Advancements in Battery Manufacturing
Technological Area
Advancement
Expected Impact on Costs
Anode/Cathode Materials
Silicon, lithium metal anodes; New cathode materials
Lower material costs, increased performance
Solid-State Electrolytes
Improvements in ionic conductivity
Enhanced safety, longevity, and energy density
Cell Manufacturing Processes
Advanced Process Control (APC)
Higher yield and consistency, cost reductions
Automation
Scaling up to gigafactory production
Improved production efficiency, lower operational costs
Federal Incentives
Tax credits for domestic manufacturing
Encouragement of local production & innovation
Emerging Storage Technologies
Na-S & magnetic flow batteries
Alternative to lithium-ion with potentially lower costs
Government Initiatives and Policies to Support Cost Reduction
In the quest to lower battery storage manufacturing costs, government initiatives and policies play a pivotal role. Efforts towards localization have begun to reshape the battery industry landscape significantly, with regions such as the US and Europe poised to see impacts on battery pack prices as local production scales up. Such strategic initiatives aim to foster regional economies and reduce reliance on international supply chains, which may be vulnerable to geopolitical and market fluctuations.
One of the key US policy measures that have energized the battery manufacturing sector is the $45/kWh production tax credit for cells and packs as introduced in the Inflation Reduction Act. This initiative underscores the government's commitment to offset manufacturing costs, thereby stimulating the domestic battery industry. When combined with a sustained thrust on R&D, manufacturing process improvements, and capacity expansions, these initiatives form a strong foundation for cost reduction in battery technology.
Market analysts at BloombergNEF project that next-generation technologies, such as those involving silicon and lithium metal anodes, will be instrumental in perpetuating this downward price trend. Encouragingly, large markets like the US and Europe are taking vigorous action to boost local cell manufacturing, closely monitoring the beneficial repercussions of incentives and mineral regulations on battery costs.
Subsidies and Incentives for Battery Manufacturers
Following suit, enticing subsidies and incentives are available to battery manufacturers. These financial stimulants are part of an array of programs—including the Industrial Efficiency and Decarbonization Office, the Office of Clean Energy Demonstrations, the Advanced Energy Project Credit, and the Advanced Industrial Facilities Deployment Program—which are designed to catalyze the industry.
Specifically, the Inflation Reduction Act extends tax credits that envelop the production of electrode active materials, battery cells, and battery modules, thereby emboldening the clean energy sector. According to industry estimates, these federal incentives could effectually reduce energy storage costs by 40% or more, significantly bolstering US competitiveness in the global battery market.
Furthermore, policy architecture at both federal and state levels is paving the way to establish new rate classes for flexible loads—such as thermal batteries. This builds a conducive environment for deploying these technologies while potentially unlocking new revenue avenues for utility operators. It is widely hoped that the IRS guidance on the 45X Advanced Manufacturing Production Credit will confirm industrial thermal batteries as a recognized energy storage technology.
Research and Development Funding
Global R&D funding has witnessed a pronounced surge. In India, the draft National Electricity Plan has laid out audacious goals to develop battery energy storage, targeting installations between 51 to 84 GW by 2031-32. Across the ocean, the Australian Renewable Energy Agency (ARENA) has committed to funding support for substantial grid-scale storage capacities, advocating the integration of modern grid-forming inverters.
The European Commission, not to be left behind, has offered its prescriptions on energy storage with the aim of bolstering deployment efforts across the European Union. 2022 saw global investment cross the USD 20 billion mark in the battery energy storage space, with 2023 expectations speculated to exceed USD 35 billion, inspired by government objectives and operational expansion.
In the United States, the Inflation Reduction Act throws in investment tax credits for stand-alone storage, fostering a competitive arena for grid-scale storage endeavors, further accelerating the shift towards cleaner energy sources.
Collaborations and Partnerships
The collaborative fabric within the battery industry is being fortified by various programs such as the Technology Collaboration Programme, which centers on expediting the research, development, and commercialization of energy technologies. Moreover, there is a collective focus on the Role of Critical Minerals in Clean Energy Transitions, emphasizing the vital function of minerals in the ascension of clean energy technologies.
The Solar Energy Industries Association advocates strategic actions to enhance the competitive stance of US energy storage manufacturing, emphasizing the importance of raw material access and the reduction of initial investment costs. However, localization in the US and Europe could initially mean higher battery pack prices, as factors such as energy expenses, equipment, land, and labor costs are comparatively higher than in Asian markets. Despite this, industry analysts like BloombergNEF forecast that consistent R&D investment and process enhancements will propel battery technology forward, translating to tangible cost reductions in the foreseeable future.
Opportunities for Cost Reduction in Battery Storage Manufacturing
The battery storage manufacturing industry faces numerous challenges in achieving cost reductions, but opportunities abound for those willing to innovate and adapt. Localizing manufacturing is a double-edged sword, as initial costs in regions like the US and Europe may be higher than in Asia. However, policies like the $45/kWh production tax credit provided by the Inflation Reduction Act can help offset these higher expenses. Importantly, a focus on research and development (R&D), process improvements, and capacity expansion is critical for long-term cost reductions and technological advancements.
Next-generation battery technologies are on the horizon, promising significant cost savings. Silicon and lithium metal anodes, solid-state electrolytes, new cathode materials, and improved manufacturing processes are expected to revolutionize the industry. These advancements could decrease costs and improve battery performance. Strategic actions, including improving raw material access, incentives to reduce upfront costs, manufacturing expertise, partnerships with allied nations, and the development of a skilled workforce, will be vital in reducing expenses in the battery storage manufacturing sector.
Scaling up Production Capacity
To keep up with the growing demand for batteries, a massive increase in raw material usage is anticipated, with some estimates suggesting a tripling of cobalt demand and up to a ninefold increase for other materials like lithium and nickel. The industry must bravely confront this challenge as it scales up production. While localizing manufacturing may introduce higher costs initially, continued investments in R&D and supply chain improvements can minimize these impacts over time.
New battery technologies, such as silicon and lithium metal anodes, and the scale-up of lithium iron phosphate (LFP) are promising candidates for facilitating cost-effective energy storage solutions. With LFP demanding a higher volume for cost reduction, the birth of secondary manufacturers, especially in China, could prove pivotal for relieving supply chain constraints and pushing prices down.
Streamlining Supply Chain Management
The key to sustaining the battery storage manufacturing industry is to develop secure, sustainable, and diverse supply chains for critical minerals. Policymakers can play a significant role by providing incentives for battery recycling as a means to create a sustainable critical minerals source, mitigating future supply risks.
Cross-border collaboration is essential to promote battery recycling and bolster secondary supplies. In addition, private sector actions toward commercializing second-life batteries can tap into a market segment with significant potential, turning end-of-life batteries into valuable assets.
Adaptive policy measures, including recycling credits, minimum recycled content requirements, and taxation on primary materials, are all strategies that can help in fostering a circular economy in battery materials, securing supply chains, and eventually reducing battery storage production costs.
Improving Energy Conversion Efficiency
Advancements in battery manufacturing technology present opportunities to enhance energy conversion efficiency, thereby reducing costs. Introducing techniques like UV-assisted photo-thermal processing reduces metal surface roughness, which can minimize resistance and improve battery function.
Furthermore, Advanced process control (APC) ensures the uniform quality of electrochemical cells, augmenting efficiency. The integration of the industrial Internet of Things (IIoT) can optimize production workflows, boosting productivity and cost-effectiveness. With projections of a 20% manufacturing cost reduction through these improved processes, the industry stands at the cusp of a new era of efficiency and profitability.
Battery Cell Recycling and Reuse
Despite technological advancements, the majority of end-of-life Li-ion batteries are not recycled but disposed of, representing a significant waste of resources. Research is ongoing for effective recycling methods, with reusing EV batteries for stationary storage emerging as a viable option. These second-life applications in residential and industrial settings could bolster the grid-scale energy storage market.
However, the proliferation of second-life uses for EV batteries is constrained by economic and regulatory hurdles, such as price competition and refurbishment costs. Here, standardization and regulatory guidance could be the key to unlocking the potential of battery reuse, paving the way for a more sustainable and economical energy storage solution.
Lowering Operational Costs
Operational costs are a critical factor in the overall economics of battery storage systems. These expenses are influenced by maintenance and the efficiency of charging, tied closely to the number of cycles a battery undergoes. Innovations that prolong battery life and enhance round-trip efficiency will have a positive knock-on effect on these costs.
With the boom in electric vehicle demand driving Li-ion investment costs down, this trend is set to continue, potentially aided by advancements in recycling. Moreover, the components required for stationary storage, including the balance of system and energy management systems, likely will see cost decreases through industry synergies. Addressing these factors holistically offers a valuable path to reduce operational expenses and ensure the long-term viability of battery storage solutions.
Case Studies: Successful Cost Reduction Strategies
The battery manufacturing industry is frequently cited as one of the fastest-growing markets, with an expected compound annual growth rate of 11.6% and an estimated value of $77.42 billion by 2024. Such growth is underpinned by breakthroughs in energy density and aggressive cost-reduction strategies. Notably, solid-state batteries, highlighted by innovations such as Li-ion with silicon anodes and Li-air technologies, are predicted to experience significant advancements in the coming years. This trajectory mirrors what the PV industry achieved by applying tight semiconductor manufacturing practices to improve process variability and consequent manufacturing cost reductions.
However, these advancements could be constrained by the localization of manufacturing in high-cost regions such as the US and Europe, in comparison to Asia. Despite these challenges, companies are forging ahead with next-generation technologies like silicon and lithium metal anodes and solid-state electrolytes to carve out further cost reductions.
Tesla's Gigafactory and Vertical Integration
Tesla's Gigafactory represents a groundbreaking case study in cost reduction, illustrating the efficacy of vertical integration within the battery industry. The Nevada-based plant famously achieved a 35% cost reduction, bringing battery prices down to below $125 per kWh. This significant price drop was crucial for Tesla's competitive positioning in the electric vehicle (EV) and energy storage markets.
Tesla's foray into vertically integrated battery manufacturing at the Gigafactory has proven to be a decisive move. Not only did it enhance their grip over the supply chain and battery costs, but it also fortified their capability to offer integrated solutions like the Powerwall, optimizing battery storage for PV-generated electricity. Such strategic integration underlies Tesla's resolve to slash manufacturing costs while scaling energy solutions.
BYD's Approach to Economies of Scale
BYD, a behemoth in battery manufacturing, predicates its cost reduction strategy on realizing economies of scale. The company's commitment to augmenting production capacities employs an approach that has been foundational for the success seen in the PV industry. This strategy seeks to incrementally diminish manufacturing costs through scaling production processes and technological enhancements.
As BYD navigates localization in regions with higher operational costs, such as the US and Europe, it has concentrated efforts on large-scale capacity development. This prepares the ground for sustained investment in R&D, process improvements, and capacity growth — fundamental aspects that not only further BYD’s position but also advocate for industry-wide cost reductions in battery technology over time.
LG Chem's Utilization of Advanced Manufacturing Techniques
South Korea’s LG Chem stakes a claim as one of the industry's vanguards, reaping the benefits of extensive production scales that pivot on advanced manufacturing techniques. Considering its well-established positions in chemistry prowess, process innovation, and intellectual property, LG Chem strides alongside industry giants such as Panasonic, Samsung, Tesla, and Hitachi.
LG Chem distinguishes itself through the deployment of cutting-edge manufacturing protocols, which have been instrumental in driving down costs while maintaining superior battery quality and performance. The company's attentiveness to pioneering process modifications and embracing innovative practices shores up its competitive endurance, a testament to the critical role of advanced manufacturing in cost reduction within the battery sector.
The pathways laid by these industry leaders reveal a unifying theme: the scalability of advanced manufacturing techniques and economic strategies are central to driving down battery storage manufacturing costs while fortifying the transition to clean energy.
Future Outlook and Projections
The battery storage sector is poised for remarkable transformations in the coming years, with several indicators pointing toward shifts that could reshape cost structures and market dynamics. Notably, insightful projections from Commodity Insights herald a bright future, with battery module costs expected to plunge to as low as $91/kWh by 2030. Bloomberg New Energy Finance (BNEF) echoes these sentiments, forecasting an average battery pack price decrease to $113/kWh by 2025 and an even more compelling $80/kWh by 2030. Accounting for the current economic landscape, the average prices for lithium iron phosphate (LFP) cells currently sit 32% below their lithium nickel manganese cobalt oxide (NMC) counterparts as of 2023.
Despite a recent surge in battery storage prices, industry analysts anticipate this phenomenon to be a transitory hurdle, with a market correction likely materializing post-2023. Moreover, the battery storage industry is grappling with supply limitations in the face of its modest proportions compared to the voracious electric vehicle (EV) marketplace. Illustratively, Volkswagen AG's battery procurement over the next three years is estimated to equate to the aggregate pipeline for the top ten energy storage system integrators, which is approximately 10% of total batteries.
Projected Cost Decline in Battery Storage Manufacturing
The trajectory of battery storage manufacturing costs is forecasted to exhibit a downswing in the medium to long term. While energy storage module costs notably edged upwards, nearing $200/kWh in 2022, they are set to experience a decline, hitting the $91/kWh mark by 2030. Battery pack prices are also anticipated to tread a similar path, with expectations set at $133/kWh in 2023, followed by reductions to $113/kWh in 2025 and $80/kWh in the epoch-making year of 2030.
This anticipated cost decline stems from relentless technological innovation and manufacturing enhancements. Localization initiatives in regions such as North America and Europe could influence battery pack economics as these areas incubate fledgling industries. Scalable advancements through sustained R&D investments, coupled with the relentless refinement of manufacturing processes and bolstering of supply chain capacities, are universally recognized as pivotal influences driving battery technology cost reductions over the ensuing decade.
The Role of Innovation and Experience Rates
Innovation remains the lifeblood of the battery industry's cost-reduction initiatives. Investment continuity in R&D, refining of manufacturing techniques, and bolstering supply capacities are instrumental in driving down costs and improving battery technology. Up-and-coming technologies, including the development of silicon and lithium metal anodes, solid-state electrolytes, and novel cathode materials coupled with modern cell manufacturing approaches, are anticipated to be cornerstones for further cost economization.
Battery lifespans and performance benchmarks are also slated for betterment, which will indirectly contribute to the curtailment of service delivery costs. Projecting forward, by the year 2030, the overall installed costs for battery storage might undergo a decrement ranging between 50%-60%. Lithium-ion battery costs specific to stationary applications could witness a drop beneath the USD 200 per kilowatt-hour mark. Strategic actions that champion the scaling of domestic production, the deployment of storage technologies to enhance grid dependability, and the leveraging of the U.S.'s manufacturing acumen, collaborative international relations, and a proficient workforce will be central to this evolution.
Impact of Electric Vehicle Adoption on Battery Costs
The precipitous descent in battery costs in recent times owes much to the exponential rise in production capacity throughout the value chain, juxtaposed with demand that fell short of expectations. Pricing for the packs of battery electric vehicles (BEV) marked a significant diminution, coming in at $128/kWh on a volume-weighted average in 2023. It is noteworthy that at the cell level, these costs chalk up to an average of merely $89/kWh, which represents a staggering 78% of the total pack price for BEVs.
Innovative changes within pack design, including the transition to cell-to-pack methodologies, have served as catalysts for cost reductions in batteries. Over the preceding four-year window, the market witnessed a paradigm shift in the cell-to-pack cost ratio from the once standard 70:30 split, indicative of the evolutionary strides in battery manufacturing processes and the ripple effects of expansive EV adoption.
Enacting new policy is vital to reducing thermal battery costs and accelerating their deployment. The federal government could offer financial incentives for thermal batteries via programs through the Industrial Efficiency and Decarbonization Office, the Office of Clean Energy Demonstrations, the Advanced Energy Project Credit, and the Advanced Industrial Facilities Deployment Program.
If you'd like to read more on how to calculate the levelized cost of storage, we'd recommend looking at the World Energy Council's report on shifting from cost to value in wind and solar applications, the U.S. Department of Energy's Energy Storage Grand Challenge Roadmap, the 2018 PV + storage cost analysis from NREL, or the University of Oxford study on the LCOE of PV & grid-scale energy.
