Logan Goldie-Scott, head of BloombergNEF's energy-storage analysis, said in March that a "mid-size" lithium-ion battery could cost only $62 per kWh by the year 2030. He even noted that some companies may even "undershoot" and sell their packages at a cheaper price than what is being forecasted, but that others, may sell theirs at higher prices.

The cost of lithium-ion batteries can fall even more rapidly over the next two decades. The major reason is that there will be mass production of the products, as needed to meet the demand due to the expected sharp increase in the number of devices using battery power, especially electric vehicles. This is the conclusion of a new science-for-policy report (JRC).

The report shows that a price reduction of at the very least 50% from 2030 down to about 75% in 2040 is possible if the strong growth in demand continues. Due to indirect effects, battery storage applications should also benefit from the significant cost reductions, albeit slower.

Lithium-ion batteries are therefore forecasted to be at least 50% cheaper over the next decade

Lithium-ion battery technology charges ahead

Most experts agree that the prices of energy storage will fall drastically in the coming years. But there is no agreement so far on how far we will wait, or the speed of the fall. Some have predicted a gradual decline over the next few decades, while others predict a drastic fall in price over the next 10 to 15 years. Regardless of the speed or the rate of the fall in prices, one thing is for sure, the price of energy storage will fall, and there will be lots of options to the end-users. As you have known, Lithium-ion batteries are leading other batteries in the energy storage market. So if energy storage becomes cheaper, it is needless to say Lithium-ion batteries will be at the fore.

The analysis shows that the price of a full set of automotive lithium-ion batteries could fall from $500 or $600 KW/hour to around $200 kilowatt per hour by the year 2020, and then to about $160 per kilowatt hour2025. This will drag the prices of commodities down because there will be less reliance on the use of gasoline engines. Devices making use of electricity will increase and become cheaper due to mass production and adoption.

The application of lithium-ion batteries in several sectors will be on a larger scale, and the environment will be better for it since there will be less emission of carbon and more use of renewable energy.

To obtain the price reductions to the magnitude forecasted in this article, the industry players need to increase their scale of production, reduce component prices and also commercialize the capacity-boosting battery technologies which are emerging from laboratories nowadays.

These goals will not and do not promise to be easy to achieve, but the consumer electronics industry is leading the charge with the rapid advancement of consumer lithium-ion batteries. Also, the other sectors, which include the semiconductor and solar PV industries, have already put in place ways for battery players to achieve the required savings. As the future evolves (and if it does according to our price forecast), the reduction of price in energy storage will affect a variety of industries, ranging from transportation to petroleum to health –which is very good for the average man. Consequently, energy will be more affordable and accessible and there will be more money to keep investors and consumers happy.

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