Using current data about of the state of technology turns out to make a huge difference, the study shows. Many institutional forecasters assume a linear decline of the cost of EV battery packs 2010 and 2050. This would result in price parity with ICE as late as 2045. But that assumption is already proven wrong by real world developments. McKinsey & Company estimates a nearly 80% decline of the average battery pack price from $1,000/kWh in 2010 to $227/kWh in 2016.

(Note that these are averages and estimates. Car makers are tight-lipped about the cost of their battery packs. Although a quarrel between GM and Tesla made them both show their hand last year. Leading each to claim to have driven down the price to below $190/kWh.)

It is widely assumed that EVs will be cost-competitive at a battery pack price of around $150/kWh. We’ll have to wait and see whether this will be achieved in 2020 as the study predicts. But what is certainly true is the authors’ assertion that institutional forecasters should work with up-to-date data. Considering the speed at which the costs have dropped so far, 2020 seems a lot closer to the mark than 2045. And Volkswagen, at least, is a believer. It already has an ad up for its new all-electric Volkswagen I.D.: ‘The I.D. is due to be launched in 2020 at a price on a par with a comparably powerful and equipped Golf.’

The report titled Expect the Unexpected is produced by CTI in partnership with the Grantham Institute at Imperial College London. The report includes a similar adjusted model for solar power adoption. The study also offers interactive charts where you can explore the data.

Image: public domain