Oxford, England — Fully cost-competitive electric vehicles will be on European roads by 2024-25 if battery costs continue to fall at current rates, according to speakers at Oxford City Council's EV Summit 2018 at the Said Business School, Oxford.
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Lithium-ion battery costs in China, which meets a major tranche of global demand, are falling at around 10% a year, Bank of America Merrill Lynch vice president, automotive research Martyn Briggs said.
That meant battery-driven electric vehicles were on course to reach cost parity with diesel and gasoline cars by 2024 at the earliest, and 2030 at the latest depending on take-up of EVs and nickel and cobalt costs.
Bloomberg New Energy Finance's Colin McKerracher said cost parity would be reached around 2025.
Until then, policy support was needed to ensure EV demand continued to grow, driving the lithium-ion battery "learning curve."
Data showed that each time production volumes doubled, lithium-ion battery costs fell by 18%, McKerracher said.
"The learning curve is a powerful indicator of a technology's potential," McKerracher said, noting that lithium-ion battery pack costs had fallen from $1,000/kW in 2010 to $209/kW last year.
Volume growth would come primarily from China, which was targeting 7 million EV sales a year by 2025.
"China's industrial policy push is incredibly strong," he said. "There are national subsidies, regional subsidies and, most importantly, there are city-level policies."
In 2017, six Chinese cities accounted for 21% of global EV sales, having introduced restrictions on the purchase and use of internal combustion engine vehicles.
"We're at the very start of seeing city-level policies around the world driving EV numbers up," he said.
At a more modest level, UK city councils were spearheading EV infrastructure investment, Oxford City Council Leader Susan Brown said.
"We are committed to introducing a zero-emission zone in Oxford city center, banning diesel and petrol vehicles in stages between 2020 and 2035, taking [nitrogen oxides] to near-background levels," she said. Other cities like Nottingham, Bristol and Dundee were following similar paths, she said.
Noting that the UK was at risk of missing its fourth and fifth carbon budget targets because of a failure to tackle transportation emissions, Brown said the onus was on cities to "build our own infrastructure, accelerate the transition and reduce the health impacts" of harmful emissions.
Eric Ling from Vivid Economics noted that a number of UK organizations, including power industry association EnergyUK and parliament's Committee on Climate Change, had called for an acceleration in EV adoption, bringing forward to 2030 the government's 2040 commitment to phase out diesel and petrol cars and vans.
"Falling battery costs, and their impact on the underlying costs of EVs, meant that this shift may not be as radical as it seems," Ling said.
The latest projections imply that a battery pack for a 240-km EV in 2030 would cost "just a couple of thousand pounds. Add that to the purchase price of an EV and that is a 10% to 15% increase on that price. On a total cost of ownership basis, by 2030 that vehicle is a cheaper option [than a diesel/petrol vehicle]," Ling said.
A big chunk of the savings came from reduced running costs assuming smart charging habits. "We calculate that allowing cars to charge overnight could cost in total around GBP100 ($132) a year on a domestic electricity bill," Ling said.
While a transition to EVs was assured, there were risks associated with perceived opportunities, he said.
Research suggested people needed to see an extensive and visible charging infrastructure to even consider switching to an EV, "but we also know that once they have an EV they tend to charge at home. And as battery costs come down and driving ranges increase, it is not clear how much that charging infrastructure would need to be used," Ling said.
The fundamental aim of E.ON's e-mobility strategy, meanwhile, was to connect cities, said Mathias Wiecher, head of ultra fast charging at E.ON Solutions.
E.ON is developing a network of fast charging stations on continental European motorways linking seven countries, providing 20-minute charge times, which is "close to a normal break needed on longer journeys," he said. "We are investing a lot of time and effort into turning that 20 minutes into what we call a meaningful break for work and rest."
The German company was working on a "new ecosystem of partners, including Tank&Rest, Clever, Chargepoint, ABB and automakers like Nissan, to create this European network of autobahn charging stations," he said. --Henry Edwardes-Evans, firstname.lastname@example.org
--Edited by Keiron Greenhalgh, email@example.com