Unexpected factors behind rapid cost decline of lithium-ion batteries

According to an MIT team, by far the biggest factor was work on research and development, particularly in chemistry and materials science, rather than gains achieved through economies of scale, which is only the second most significant reason for the reductions.

The findings could be useful for policymakers and planners to help guide spending priorities in order to continue the pathway toward ever lower costs for this and other crucial energy storage technologies, the researchers said.

The project also suggests there is still considerable room for further improvement in electrochemical battery technologies.

The analysis required digging through a variety of sources, since much of the relevant information consists of closely held proprietary business data.

“The data collection effort was extensive,” said lead author Micah Ziegler. “We looked at academic articles, industry and government reports, press releases, and specification sheets. We even looked at some legal filings that came out. We had to piece together data from many different sources to get a sense of what was happening.”

They collected “about 15,000 qualitative and quantitative data points, across 1,000 individual records from approximately 280 references,” he added.

Data from the early days of the technology are hardest to access and have the greatest uncertainties, according to MIT professor Jessika Trancik. But by comparing different data sources from the same period they have attempted to account for these uncertainties.

“We estimate that the majority of the cost decline, more than 50 per cent, came from research-and-development-related activities,” Trancik said. That included both private sector and government-funded research and development, and “the vast majority” of that cost decline within that R&D category came from chemistry and materials research.

“There were so many variables that people were working on through very different kinds of efforts,” including the design of the battery cells themselves, their manufacturing systems, supply chains, and so on, she added. “The cost improvement emerged from a diverse set of efforts and many people, and not from the work of only a few individuals.”

The researchers believe their findings show the importance of investment in R&D, because much of it happened after lithium-ion battery technology was commercialised, a stage at which some analysts thought the research contribution would become less significant.

Over roughly a 20-year period starting five years after the batteries’ introduction in the early 1990s, most of the cost reduction was still coming from R&D.

The study took advantage of an analytical approach initially developed to analyse the similarly precipitous drop in costs of silicon solar panels over the last few decades.

The researchers hope their methodology can help provide guidance on public spending, private investments, and other incentives in the future.