Ashley Nunes is a senior research associate at Harvard Law School and teaches economic policy at Harvard College .
EVs clearly have a long way to go before they can make money for automakers. Why, many argue, comes down to an EV’s most prized valuable asset: the battery. These batteries reduce our reliance on gasoline – a climate killer. But there’s a trade-off. Batteries are made from rare minerals such as cobalt, nickel and lithium , which collectively account for a hefty part of the vehicle’s production cost. Higher costs mean higher prices for consumers.
For one thing, falling battery prices don’t guarantee that EV prices will follow. In fact, history suggests the opposite is true. In 2011, EV batteries sold for more than US$1,000 per kilowatt hour . By 2017, that figure had dropped to US$250, and in 2022, batteries cost just US$153 per kilowatt hour. Falling prices should have benefited consumers. Except they didn’t. During the same time, EV prices rose from US$43,871 in 2011, to US$62,760 in 2017, to US$74,460 in 2022.
Because of this, the only way for an EV to reduce emissions is on the road. More kilometres driven in an EV means more climate benefits. But, as Bloomberg’s Kyle Stock, notes, “If a vehicle is going to be sitting idle in a garage, a gas-burning version is arguably a cleaner option than an EV, because of all the carbon that goes into making the latter.” Worryingly, studies show that EVs are often driven less than their gasoline powered counterparts.
Ford Prices Battery Money Planet Ford Company Evs Jim Farley Harvard College Oakville
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