The Lithium Revolution

Another very interesting and important section of the Deutsche Bank report we discussed yesterday is the section on lithium battery prices.  Deutsche Bank analysts are projecting a 7.5%/year rate drop in prices per kWhr (other analysts have similar expectations).  However, as the graph above shows, in the last 13 months they've been obliged to drop their price estimates by 30%.  Also, the historical price curve for laptop batteries has averaged 14%/year.  So there's some reason to think the 7.5%/year cost curve might be on the conservative side.  Prices might fall faster.

In any case, given Deutsche Bank's estimates, here's how the payback time of a pure EV evolves compared to an equivalent conventional car, assuming $3.25 gasoline, 10c/kWhr electricity and 15k miles/year:

In other words, by 2020 EVs will be economically competitive with conventional cars, even unsubsidized, rather than requiring paying a substantial premium (or assuming very high future oil prices to justify the cost).  Given their superior low-end acceleration and quieter operation, you can imagine a critical point being passed at which noisy, dirty, planet-trashing, slow, oil-powered cars just start looking like something only your grandmother would drive.  It seems like the import of Deutsche Bank's analysis is that this kind of tipping point might be only a decade away.

This would make the climate change political problem look a lot more tractable. I think we'd discover that a lot of people would be perfectly willing to believe in anthropogenic climate change if doing so didn't require them to make major lifestyle sacrifices.

This doesn't just apply to cars.  To continue the riding mower discussion of the other day, here's the comparison for Ariens, a common maker of this kind of thing.  Here's their electric offering:

And here's the lower end gasoline offering:

The electric one costs $2k, and the gas one can be had for $1200.  So besides the electric costing a lot more, and looking like a prop from White and Nerdy, it has 8" less cutting width and only a little more than one third the horsepower (7.4 versus 20).

But this isn't an incurable situation.  There's nothing that prevents putting a 20hp electric motor and enough battery to mow an acre or two into a mower except economics.  As the electric car market develops, it will drive down the cost of motors and batteries for a wide variety of other spaces too.   So hopefully in a decade the electric riding mower will be reasonably competitive.

Besides existing applications like lawn mowers and power tools, this trend probably enables new applications in mobile robotics, and other markets we haven't even thought of yet.

I guess I'm wondering about when we get the electric sheep...