Battery Cell Costs Set to Plummet: RMI Report

The global energy think tank predicts that costs will reach an astonishingly low range of USD 32-54 per kWh, coupled with top-tier cells boasting an energy density of 600-800 Wh/kg.

January 23, 2024. By Abha Rustagi

The Rocky Mountain Institute (RMI) has released a report forecasting a substantial decline in battery cell costs in the coming years.

The global energy think tank predicts that costs will reach an astonishingly low range of USD 32-54 per kWh, coupled with top-tier cells boasting an energy density of 600-800 Wh/kg.

Key factors contributing to this projected cost reduction include an increase in battery energy density, a decrease in battery cell costs, and a remarkable surge in battery demand.

The report reveals that the learning curve for battery cell costs, dating back to the introduction of the first lithium-ion battery in 1991, has been 19 percent.

Highlighting this trend, the report states, "Battery prices have decreased by 19 percent with every doubling of global battery production." The learning rate for battery cell costs has escalated over time, reaching 29 percent in the past two decades.

The RMI report underscores the relationship between increased battery production, cost reduction, and improved quality. Both battery cell costs and energy density exhibit consistent learning curves.

For every doubling of battery cell production, costs decrease by 19-29 percent, and leading cells see an energy density increase of 7-18 percent. At this pace, the report anticipates battery cell costs dropping to USD 32-54 per kWh, with top-notch batteries achieving an energy density of 600-800 Wh/kg by 2030.

Emphasizing the exponential growth in battery demand, the report notes a domino effect driving adoption. As battery demand escalated with an average annual growth rate of 41 percent, doubling every two years since 2014, the global market witnessed an enhancement in energy density and a decline in costs. This cascading effect accelerated technology adoption, leading to a sharp increase in battery demand.

The RMI report concludes by highlighting the domino effect's potential to displace approximately half of the global demand for fossil fuels, playing a pivotal role in reducing emissions related to transportation and energy. This exponential growth positions batteries as a cornerstone in achieving over 60 percent in zero-emission energy.

Tags:

Energy Storage

Battery Cells

Rocky Mountain Institute

RMI

Energy density

Battery demand

battery energy density

Emission

zero-emission energy