BOX 2.1

Department of Energy Targets for Battery Performance

The Department of Energy has set several targets for battery performance:

  • Battery cost.

    • PHEV-10: (3.4 kWh available energy at end of life)1 $500/kWh or $1,700 battery cost2 achieved in 2012 vs. $1,000+/kWh today

    • PHEV-40: (11.6 kWh available energy at end of life) $300/kWh or $3,400 battery cost2 achieved in 2014 vs. $1,000+/kWh today

  • Battery life.

    • PHEV-10: 10+ years achieved in 2012 (5,000 cycles) vs. 3+ years today

    • PHEV-40: 10+ years achieved in 2014 (3,000-5,000 cycles)

  • Maximum system weight.

    • PHEV-10: 60 kg for in 2012 vs. 80-120 kg today

    • PHEV-40: 120 kg in 2014


1This PHEV-10 is a small SUV that requires more energy than the midsize car modeled in this study.


2At high volume production.

SOURCE: Adapted from DOE (2009b).


Tables 2.4 and 2.5 compare the current incremental cost of components for a PHEV-40 and a PHEV-10 with those of a conventional (nonhybrid) car. Savings from eliminating components or reducing size are shown as negative numbers; for example, the automatic transmission can be eliminated when the drive is electric.11 These incremental numbers are for the first round of PHEV production, including the estimated cost of the battery pack, the least well defined of the costs. Initially, the PHEV-40 is expected to cost the vehicle manufacturer about $18,000 more than an equivalent conventional car and the PHEV-10 to cost about $6,300 more. The price to the customer, before government subsidies, is likely to be significantly higher once manufacturers’ additional expenses and profit and dealers’ markup are added in.

These costs are likely to decline over time. Table 2.6 summarizes projections of cost reductions for the different components for the two PHEV types for 2015, 2020, and 2030. Reduction estimates are posited on technology improvements, on experience gained over time through several cycles of technology evolution, and from increased economies of scale. The committee held discussions with various experts who provided valuable input to this table. There was good agreement on the expected rate of improvements, particularly for the non-battery components, where there is considerable experience. There also was general agreement that battery pack costs would decline significantly, but not dramatically, for the first 10-15 years of commercial experience and would later slow.

The reductions expected mirror the experience with NiMH batteries for HEVs, where costs came down significantly at first but then decreased much more slowly. The NiMH battery pack for HEVs saw a cost reduction of about 11 percent from 2000 to 2006 but since has seen much less change. Li-ion battery cost decreased by about 35 percent from 2000 to 2008, but most of that was at the beginning of that period, with only about 5 percent after 2004 (Howell, 2009). Manufacturers of Li-ion batteries with technology similar to consumer batteries are already considerably further along the learning curve than were manufacturers of NiMH batteries when HEVs were introduced, so steep cost reductions seem unlikely. Nor does it seem likely that the cost of materials will decline greatly. Indeed, some materials, including lithium, may increase in cost with additional demand, but the committee believes that the supply of lithium will be adequate for any plausible number of PHEVs manufactured worldwide.

It is likely that much of the reductions in Li-ion cell costs will come from technology innovations, with smaller reductions from manufacturing improvements and volume


The PHEV-10 will require a transmission because the engine is connected directly to the wheels. However, the committee assumed that manufacturers would use a small, electronically controlled continuously variable transmission (ECVT) such as used in the 2010 Prius. This cost is included under power electronics in Table 2.5.

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