Why Battery Cost Could Put the Brakes on Electric Car Sales

Battery prices need to drop by more than half before electric vehicles will be competitive with cars powered by internal-combustion engines, according to Bloomberg New Energy Finance, whose two-day Future of Energy summit in Shanghai concludes on Wednesday. That’s likely to happen by 2026, when the cost for lithium-ion battery packs is projected to fall to about $100 per kilowatt hour, speakers at the summit said.

The focus of the industry has moved from lithium-ion batteries using liquid electrolytes to solid-state ones, which address the need for safer and more powerful energy storage. Toyota Motor Corp. has said it’s working to commercialize the technology in the early 2020s, and Dyson Ltd. says it will build an electric car using solid-state batteries in three years. The British company plans to invest one billion pounds ($1.3 billion) to develop the car, plus the same sum to create solid-state batteries for it. That investment would outpace those made by other major EV makers such as Tesla Inc.