Despite cost reduction projections, battery innovation continues

By Max Frankel on 12 July 2012

Expectations in the battery industry were, until recently, that the cost of Lithium-Ion, sodium nickel chloride (known as ZEBRA), and vanadium redox flow batteries (VRFBs) would plummet to less than $200/KWh in the next decade. Instead, Lux Research has released a market report that says that the high capital costs associated with battery production will keep costs at or near $500/KWh for at least the next 10 years.

Though the projected prices are lower than current prices, they fall substantially short of the expectations which were perpetuated, notably, by Tesla CEO Elon Musk.

Each battery type has its own impediments for achieving the lower cost goals. According to the report, Li-ion batteries will steadily lose market share to the other types, but will remain in demand due to their high energy density. Lux projects the cost of Li-ion batteries to fall 45 percent in the next decade.

The outlook is less optimistic for ZEBRA batteries. Lux says that the production costs associated with these molten-salt batteries accounts for up to 60 percent of total costs. Until the process of refining the raw materials can be improved, costs for ZEBRA batteries will remain high. ZEBRAs, however, have the most commercial potential of the three types examined.