In its May 2000 report "Costs of Lithium-Ion Batteries for Vehicles," the DOE published its estimate of the prices Li-ion battery packs would need to achieve before HEVs, PHEVs and EVs could be cost-competitive. For complete details see Section 6 beginning on page 37.
| Battery Type | Baseline | Optimistic | Industry Goal |
| High-Energy (35 kWh Battery Pack) | $706 per kWh ($24,723) | $250 per kWh ($8,767) | >$150 per kWh (USABC) |
| High-Power (100 cells, 10 A-h each) | $2,486 | $1,095 | $300 (PHGV) |
These figures were not a forecast of what the Li-ion battery companies were likely to achieve. They were a simple statement of the fundamental economic barriers to entry that had to be overcome before a market could develop.
After nine years of work and incalculable spending on Li-ion battery research and development, the following table shows exactly how far the Li-ion battery industry has come.
| Manufacturer | Chemistry | Current Price | Target Price |
| Ener1 (HEV) | Li-polymer | $660 per kWh | N/A |
| Valence Technologies (VLNC) | Li-phosphate | $1,000 per kWh | $500 per kWh |
| Altair Nanotechnologies (ALTI) | Li-titanate | $1,000 per kWh | N/A |
| A123 Systems (power tool packs) | Li-phosphate | $1,228 per kWh | N/A |
| 2008 DOE SEGIS-ES Estimates (PV Solar battery packs) | Various | $1,333 per kWh | $780 per kWh |
| 2009 NEDO Survey Results (Average of Japanese Producers) | Various | $2,018 per kWh | $1,000 per kWh (next year) |
Price stagnation is the kindest term I can use for nine years of research that has failed to reduce costs.
In the 2008 Annual Progress Report for its Vehicle Technologies Program, the DOE reported that the cost of high-energy Li-ion batteries for PHEV and EV applications "is approximately a factor of three-five too high on a kWh basis." Likewise, with respect to high-power Li-ion batteries for HEV applications, the DOE reported that the cost "is approximately a factor of two too high on a kW basis." Is it any wonder that a recent report on the electric two-wheeled vehicle (E2W) market in China says that roughly 85% of new E2Ws are powered by heavy lead-acid batteries instead of their lighter Li-ion cousins? Could it have something to do with a 400% price differential and a population that knows the value of a dollar?
I have seen all the glowing reports about immense progress in the Li-ion battery sector. One of my personal favorites is on Slide 14 from a Summer 2008 presentation by David Anderson of the Rocky Mountain Institute that shows a highly favorable "industry consensus" regarding future Li-ion battery manufacturing costs (Click here for image PDF).
In what alternative universe is that kind of industry consensus reasonable? Over the last nine years Li-ion battery companies have had a hard time maintaining Y2K price levels much less reducing them.
While their products are safer, I've seen nothing to indicate that the industry consensus is based on anything other than hope and the certain knowledge that unless prices collapse Li-ion batteries will never be cost effective in HEVs, PHEVs and EVs.
If you can stomach more Li-ion battery reality, read it from John Petersen at altenergystocks.com
