If Battery Technology Costs 90 Percent LESS Than 10 Years Ago, WHY Do The Cars Still Cost SO Much?

Every time the talk of alternative energy vehicles surfaces (you know, the cars no one wants), the first thing I do is the math.

Because, if the arithmetic doesn’t work, what is the point?

It’s awesome to save money at the pump but at the end of the year if I spent MORE than if I just bought a gasoline car it's kind of dumb to me.

Let me qualify what I’m saying because I know you're thinking I'm a hater at this point.

Before you go there realize I’ve already owned two Prius cars.

Why? Because with the gas savings the small premium over say a Honda Civic works out in my favor.

But the rest of them, not so much.

$40k for a Volt? Leaf? I don’t see ANY benefit for those over a Prius.

We here at Auto Spies have always been of the belief that a $13k Prius would do more the environment and for people than a 100k Tesla.

So when I read this article in the WSJ, I had to scratch my head.

It’s an article dedicated to the Chevy Bolt and in the body copy it mentions battery technology costs 1/10 of what it cost 10 years ago.

That made me ask this 64,000 question…

WHY THE F DO THESE THINGS STILL COST SO GD MUCH?????

$40K for a BOLT? C’mon man!

Tell us Spies, how could these cars using mostly the SAME technology, still cost what they do?

Spies, discuss...

atc98092 - 2/17/2016 8:18:31 AM

+3 Boost

Well, that's 85%, not 90, but we won't talk about your math skills. :)

Battery cost is only one part of the issue. Compared to 10 years ago, electric cars are significantly less expensive. Remember that GM wouldn't even sell their original EV because the price would have been sky high. Also, during those same 10 years cars have had to meet increasingly stiffer safety standards, and for hybrids they also had to meet the latest emissions standards.

Don't forget, for respectable driving range an electric car still requires a significant size of battery. Even at $145/kwh, the Tesla P90 battery alone is $13,050. That doesn't factor in the electric motors and electronics that go into the drivetrain. Compared to the cost of a ICE engine/transmission, it's likely 3-4 times more expensive just for the drivetrain. Also remember that an electric car requires some sort of HVAC that is again vastly more expensive compared to an ICE automobile.

Once electric cars reach a much higher sales volume, they will benefit from the economies of scale that ICE cars already enjoy. And that kind of volume is still a bit away.

MDarringer - 2/17/2016 8:39:35 AM

-7 Boost

Another very simple reason hybrids and EVs are pricey is because consumers expect them to be. Environmental lunatics worried about the Earth's blood feel they have a need to atone for cheap fuel by overspending on a hybrid to the point that their fuel savings take years to pay off the difference between it and a conventional car. But that's OK because they are sinners and need to pay the price. The especially devout, messianic types want the car company to price fix and cash rape them as they pay their price for fossil fuel addiction.

I love blasting past those idiots in a TVR with RMF plates. :)

MDarringer - 2/17/2016 9:32:12 PM

+1 Boost

Brilliant.

vdiv - 2/17/2016 11:20:19 PM

+1 Boost

The cost per kWh of the individual cells is not the same as the cost of the whole battery pack that includes cooling, sensors, management system, enclosure, etc. There is also the R&D cost that needs to be amortized as well as the other electronic components that still lack the economy of scale. And while the cost of new plugins may not have come down as much as we want, those plugins have become notably more capable.

001 still has no idea of what Tesla really does and the effect it has had on the industry, or he is trying really hard to deny it.

Holydude - 2/20/2016 1:39:50 AM

+1 Boost

Ok, all of what everyone said are true, but surely if a core component, and a very expensive one at that, dropped 85% in price, shouldn't it be reflected somewhat on the prices somewhere??

SanJoseDriver - 3/19/2016 3:04:19 AM

+1 Boost

Well, Tesla did go from $72,500 (without the $10k of government incentives) for a Model S 60 to $70,000 for a Model S 70. The price difference is not dramatic, but it is still $2,500 less for a car with an extra 10 kWh, Supercharging included (previously a $2k feature), standard autonomous safety features, and the option to turn on Autopilot self-driving capabilities. That is about $10k in extra value if you compare the 2013 Tesla to it's 2016 counterpart.