Lithium-Ion Batteries Have Plunged in Cost by 97%– Here’s the Reasons Behind the Rapid Cost Decline

A brand-new research study discovers that financial investments in R&D on products and chemistry were essential, while economies of scale contributed rather less.

Lithium- ion batteries, those marvels of light-weight power that have actually enabled today’s age of portable electronic devices and electrical cars, have actually plunged in expense considering that their intro 3 years back at a rate comparable to the drop in photovoltaic panel rates, as recorded by a research study released lastMarch But what caused such an amazing expense decrease, of about 97 percent?

Some of the scientists behind that earlier research study have actually now evaluated what represented the remarkable cost savings. They discovered that without a doubt the most significant element was deal with research study and advancement, especially in chemistry and products science. This exceeded the gains accomplished through economies of scale, though that ended up being the second-largest classification of decreases.

The brand-new findings were released on November 22, 2021, in the journal Energy and Environmental Science, in a paper by MIT postdoc Micah Ziegler, current college student Juhyun Song PhD ’19, and Jessika Trancik, a teacher in MIT’s Institute for Data, Systems and Society.

The findings might be helpful for policymakers and coordinators to assist guide costs top priorities in order to continue the path towards ever-lower expenses for this and other essential energy storage innovations, according toTrancik Their work recommends that there is still substantial space for more enhancement in electrochemical battery innovations, she states.

The analysis needed digging through a range of sources, considering that much of the appropriate info includes carefully held exclusive service information. “The data collection effort was extensive,” Ziegler states. “We looked at academic articles, industry and government reports, press releases, and specification sheets. We even looked at some legal filings that came out. We had to piece together data from many different sources to get a sense of what was happening.” He states they gathered “about 15,000 qualitative and quantitative data points, across 1,000 individual records from approximately 280 references.”

Data from the earliest times are hardest to gain access to and can have the best unpredictabilities, Trancik states, however by comparing various information sources from the very same duration they have actually tried to represent these unpredictabilities.

Overall, she states, “we estimate that the majority of the cost decline, more than 50 percent, came from research-and-development-related activities.” That consisted of both economic sector and government-funded research study and advancement, and “the vast majority” of that expense decrease within that R&D classification originated from chemistry and products research study.

That was a fascinating finding, she states, due to the fact that “there were so many variables that people were working on through very different kinds of efforts,” consisting of the style of the battery cells themselves, their production systems, supply chains, and so on. “The cost improvement emerged from a diverse set of efforts and many people, and not from the work of only a few individuals.”

The findings about the value of financial investment in R&D were specifically substantial, Ziegler states, because much of this financial investment took place after lithium-ion battery innovation was advertised, a phase at which some experts believed the research study contribution would end up being less substantial. Over approximately a 20- year duration beginning 5 years after the batteries’ intro in the early 1990 s, he states, “most of the cost reduction still came from R&D. The R&D contribution didn’t end when commercialization began. In fact, it was still the biggest contributor to cost reduction.”

The research study benefited from an analytical method that Trancik and her group at first established to evaluate the likewise sheer drop in expenses of silicon photovoltaic panels over the last couple of years. They likewise used the method to comprehend the increasing expenses of atomic energy. “This is really getting at the fundamental mechanisms of technological change,” she states. “And we can also develop these models looking forward in time, which allows us to uncover the levers that people could use to improve the technology in the future.”

One benefit of the approach Trancik and her coworkers have actually established, she states, is that it assists to figure out the relative value of various aspects when numerous variables are altering at one time, which generally takes place as an innovation enhances. “It’s not simply adding up the cost effects of these variables,” she states, “because many of these variables affect many different cost components. There’s this kind of intricate web of dependencies.” But the group’s approach makes it possible to “look at how that overall cost change can be attributed to those variables, by essentially mapping out that network of dependencies,” she states.

This can assist offer assistance on public costs, personal financial investments, and other rewards. “What are all the things that different decision makers could do?” she asks. “What decisions do they have agency over so that they could improve the technology, which is important in the case of low-carbon technologies, where we’re looking for solutions to climate change and we have limited time and limited resources? The new approach allows us to potentially be a bit more intentional about where we make those investments of time and money.”

“This paper collects data available in a systematic way to determine changes in the cost components of lithium-ion batteries between 1990-1995 and 2010-2015,” states Laura Diaz Anadon, a teacher of environment modification policy at Cambridge University, who was not linked to this research study. “This period was an important one in the history of the technology, and understanding the evolution of cost components lays the groundwork for future work on mechanisms and could help inform research efforts in other types of batteries.”

Reference: “Determinants of lithium-ion battery technology cost decline” by Micah S. Ziegler, Juhyun Song and Jessika E. Trancik, 22 November 2021, Energy and Environmental Science
DOI: 10.1039/ D1EE01313 K

The research study was supported by the Alfred P. Sloan Foundation, the Environmental Defense Fund, and the MIT Technology and Policy Program.