Customer Logins

Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.

Customer Logins

UPDATE: Bringing down battery costs will enable automakers to meet Biden’s 50% EV sales goal: GM official

10 December 2021 Amena Saiyid

Lower battery costs will drive consumers to buy more electric vehicles (EVs) and allow US automakers to meet President Joe Biden's goal of 50% light vehicle sales electric by 2030, according to a General Motors (GM) official.

A battery is the single most expensive component of an EV, making up at least 30% of a vehicle's retail price.

"From an automaker perspective, I would say battery costs, battery costs, battery costs," said Michael Maten, senior strategist for GM on EV and energy policy, when asked about the key obstacle to greater EV adoption.

"Right now, battery costs are the significant barrier, but they are coming down. But they need to come down much further," Maten emphasized, as he spoke about the state of EVs in the US during an online panel discussion held 8 December.

The discussion, which was jointly held by the nonpartisan, nonprofit Our Energy Policy and law firm Schiff Hardin, was spurred by Biden's goal to make half of all new passenger cars and light-duty vehicles sold in 2030 zero-emissions vehicles, including battery electric, plug-in hybrid electric, or fuel cell EVs.

Transportation was responsible for 1,875.73 million mt of GHG emissions in 2019, 29% of the US total, with light vehicles (passenger cars and light trucks including sports-utility vehicles) contributing 59% of that total.

The transition to battery-powered EVs offers the greatest opportunity for US automakers to reduce their emissions. The US Bureau of Statistics said new light vehicle sales totaling 14.47 million units in 2020 accounted for 98% of total vehicle sales in 2020, according to Statista.

The Electric Vehicle Charging Action Plan that Vice President Kamala Harris released 13 December is expected to help automakers and battery manufacturers relieve anxiety about battery range and costs. The plan outlines how the administration plans to implement the Bipartisan Infrastructure Law to develop and promote charging stations across the country.

DOE revises target

Given that EVs make up just 3% of all vehicle sales in the US, Maten said cutting the cost of batteries is the single largest barrier facing automakers as they unfold plans to meet Biden's goal.

"As we transition and you reach those 30, 40, 50% penetration numbers then absolutely you will run into some ... potential supply chain bottlenecks. I don't know what those are right now because they are a little further out in the future and we don't know what technologies are out there right now," he said.

The US Department of Energy (DOE) Vehicle Technology Office has a goal of bringing the cost of an EV battery below $100/kWh to about $80/kWh by 2030. The threshold of $100/kWh is the price point at which agency researchers say EVs will be able to compete with internal combustion engine-powered cars.

Maten noted that the $100/kWh battery cost has a range of about 300 miles. "We feel the 300-mile threshold for US consumers is a big deal," he added.

The cost of a battery for a Chevy Bolt is estimated at $145/kWh, but GM has said it will lower the cost of this battery by 40% in other EV models using its first-generation Ultium batteries.

However, Steven Boyd, batteries and electrification program manager with DOE's Vehicle Technology Office, said the agency expects the $100/kWh target will be reached as early as 2025.

Recognizing the need for cheaper batteries, Boyd revealed that DOE has updated its target cost to $60/kWh.

IHS Markit projections line up with DOE's estimates, with the weighted average cost of major lithium-ion batteries used in EVs—Lithium-ion Phosphate, Lithium Nickel Manganese Oxide, Lithium Cobalt Aluminum Oxide—expected to reach $110/kWh in 2021, and $85/kWh in 2025.

Reliable supply chains

Boyd and Maten agreed with other panelists that greater EV penetration will require reliable supply chains for critical minerals such as lithium, nickel, cobalt, and manganese as well as a wide variety of vehicles to meet the needs for personal use as well as transportation of goods. A solid fueling infrastructure will also need to be in place, they said.

Dan Levy, senior equity research analyst with Credit Suisse who moderated the discussion, said the slew of announcements in recent months about battery manufacturing plants being set up in the US points to the underlying concern about supply chains.

The White House in its June report on supply chains acknowledged that China refines 60% of the world's lithium and 80% of the world's cobalt—two core inputs to high-capacity batteries—which presents a critical vulnerability to the future of the US domestic auto industry.

GM said 9 December it is entering into a strategic partnership with MP Materials to develop a fully integrated US supply chain for rare earth magnets used in EV batteries.

MP Materials owns and operates the Mountain Pass rare earth mineral mine and processing facility in California, the only active and scaled rare earth production site in America. From this mine, rare earth materials will be transformed into Neodynium-Iron-Boron magnets at a new production facility that MP Materials said it will build in Fort Worth, Texas, delivering "an end-to-end, US supply chain."

This agreement would ensure that GM receives US-sourced and manufactured rare earth materials, alloys and finished magnets for the electric motors used in the GMC HUMMER EV, Cadillac LYRIQ, and Chevrolet Silverado EV, and other EV models that the company plans to build using its Ultium Platform that will install specially-designed Ultium batteries.

On 1 December, GM also announced it was forming a joint venture with POSCO Chemicals to process critical battery minerals for the fleet of EVs that it plans to roll out in the coming months and years including its GMC Hummer EV.

GM in January pledged to manufacture 100% of EVs by 2035, and Maten said the company is rolling out plans to meet Biden's goal. The goal of all these efforts is to ramp up EV penetration, which Levy said remains low.

Penetration remains low

According to the US Environmental Protection Agency (EPA) 2020 Automotive Trends Report, which was released 19 November, hybrids, plug-in hybrids, and EVs are poised to grow in 2021, "but are currently at low adoption levels."

The EPA said EVs and plug-in hybrid EVs accounted for 2% of all production, and hybrids 5%. In the projected model year 2021 data, those categories are estimated to grow to 4% and 9% of all production.

Reaching Biden's goal will require a significant "shift" in consumer choices and automaker plans, Levy said, but he added, "what will it take to drive this shift?"

Responding to Levy, Colleen Jansen, chief marketing officer for California-based ChargePoint, a leading EV charging network, said automakers need to be prepared to supply a wide variety of vehicles for commercial and official use to transport goods and people and for personal use, while state, federal and local planners ought to be thinking about how to place charging stations where people spend most of their time.

Integrating charging with use

Jansen said EV charging will be different from the traditional fueling stations for vehicles running on internal combustion engines located at intersections.

"Charging will have to be integrated to where people spend time. For the majority of us that means where we sleep and where we work," Jansen said, adding that policymakers, whether at the federal, state, or local level, will have to consider setting up stations in multi-dwelling units, homes, places of work, and along highway corridors.

The Edison Electric Institute, a trade group representing power utilities, announced 7 December that the Electric Highway Coalition has joined forces with the Midwest Electric Vehicle Charging Infrastructure Collaboration to form the National Electric Highway Coalition.

Comprised of 51 investor-owned electric companies, one electric cooperative, and the Tennessee Valley Authority, the coalition's goal is to provide EV charging ports along major US transportation corridors by the end of 2023.

But will that be enough? Levy asked. The panelists said consumers need incentives to increase their purchases, automakers need them to build more EVs, and developers need them to defray the costs of building the supporting network.

He pointed to Norway where EVs make up at least 70% of total vehicle sales, and said that wouldn't be possible without incentives.

Congressional support

Both Jansen and Maten pointed to the recently enacted Bipartisan Infrastructure legislation that contains $7.5 billion for developing publicly accessible charging stations for alternative fuel vehicles. They also they hoped that the Build Back Better (BBB) Act legislation, which the US House of Representatives has approved and awaits action by the US Senate, will provide the right kind of financial push needed to drive greater EV adoption.

According to IHS Markit research, the infrastructure legislation will support construction, maintenance, and operation of 400,000 new EV chargers between 2022 and 2026. Biden announced in the spring a goal of 500,000 charging units nationwide by 2030.

The White House EV Plan includes more than $7 billion to accelerate innovation and facilities "across the battery supply chain from battery materials refining, processing and manufacturing to battery manufacturing, including components, to battery recycling and reuse."

The plan contains $3 billion in competitive grants for battery minerals and other refined products.

Modeling by climate thinktank Energy Innovation has shown that the BBB Act will have a "critical impact on climate and air pollution by inducing rapid market transformation, which will also benefit those most impacted by transportation pollution."

Incentives to drive adoption

It will do so through a combination of incentives offered to consumers as well as to manufacturers of EVs. For instance, the House-approved BBB Act legislation contains a maximum incentive of $12,500 per passenger vehicle, which includes:

  • a $4,000 base incentive for qualified EVs;
  • $3,500 for vehicles purchased before January 2027;
  • $4,500 for vehicles with final assembly in the US at a union facility, and;
  • $500 for vehicles manufactured with no less than 50% domestic content in component parts and battery cells manufactured in the US.

The BBB legislation also contains tax credits for EV charging infrastructure dedicated to public use, zero-emission vehicle grants for funding charging stations in underserved and rural communities, as well as affordable housing program grants for setting up stations in low-income housing including multi-dwelling units.

Electrifying the US transportation system will require collaboration among policymakers, manufacturers, and consumers, observers say.

"Everyone will need to row in the same direction" to reach Biden's goal, Maten said.

--Article updated with some details from the EV Charging Action Plan released 13 December by Vice President Kamala Harris.


Follow Us

Jun 01

RT @SPGlobal: June marks the start of Pride Month, where we commemorate and celebrate the LGBTQ+ community in countries across the globe. S…

{"items" : [ {"name":"share","enabled":true,"desc":"<strong>Share</strong>","mobdesc":"Share","options":[ {"name":"facebook","url":"","enabled":true},{"name":"twitter","url":"","enabled":true},{"name":"linkedin","url":"","enabled":true},{"name":"email","url":"?subject=UPDATE: Bringing down battery costs will enable automakers to meet Biden’s 50% EV sales goal: GM official | IHS Markit &","enabled":true},{"name":"whatsapp","url":"","enabled":true}]}, {"name":"rtt","enabled":true,"mobdesc":"Top"} ]}
Filter Sort