From The Mobilist Inbox This Week
The astonishing $60/kWh battery: I exchanged tweets with Eyvind Aven about yesterday’s piece on the U.S. Energy Department’s startling update of its target for lithium-ion battery costs. Until now, the industry — and Energy Department — Holy Grail has been to reach $100 per kWh, thought to be the inflection point for sticker-price parity with internal combustion. But the goal posts have moved: Tesla, Volkswagen and now the standard-creating Energy Department are all looking to $60/kWh as the new parity point.
For the automakers, $60/kWh is not a mere number, but a metaphorical bomb: Tesla and VW appear determined to win at all costs, and that means blowing up the internal combustion business model. This is a zero-sum game for them: They want to sell their EVs in very large numbers, and for combustion to become quickly obsolete in the minds of motorists — to inflict an “Osborne Effect” of obsolescence on rival automakers. That the Energy Department has adopted the $60/kWh standard as well puts the U.S. government behind the cutthroat goal, too.
If so, the battle will be hard-fought. Take a look at this chart that Aven tweeted yesterday. From Citi, it’s a head-to-head comparison of EV and ICE drive train costs. The slide does not disclose the cell used for the analysis, nor the size of the battery pack, but is still useful as a starting point to picture where we are: It has the cost of ICE-specific drive-train parts at €5,219 Euros, and the EV at €11,950, or more than twice as much.
That explains why the industry and the Energy Department have set the new target of $60 — because for popular vehicle types like SUVs and pickup trucks, parity won’t be found at $100/kWh or anywhere near that figure. It also shows why, even there, the war will go on.
Elon on SNL: If you’re a businessman, what’s a sign you have crossed into popular culture? For sure, a rare one would be a spot hosting Saturday Night Live. The surprising announcement that Elon Musk will play host on May 8 reportedly triggered consternation among some of the SNL staff. But for the batteries and EV community, enjoy the moment. It won’t get any better.
SK IPO: Speaking of moments, another sign of batteries making the jump to mainstream culture is SK Innovation’s spinoff of its materials unit, SK IE Technology, on Monday. In South Korea, the IPO was the biggest thing since gaming company Netmarble’s listing in 2017.
As big as gaming? I asked Mobilist friend Simon Moores, managing director of Benchmark Mineral Intelligence, whether batteries are now a movement phenomenon. “So I’m not into gaming lol,” Moores responded, “but this is a core company, core technology and core industry to a 21st century mega trend.”