Are battery costs a major component of electric vehicle costs because of how much it costs to replace them? Do consumers have to replace them? Or is it because people have been trying to build larger batteries to improve driving range?
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- Are battery costs a major component of electric vehicle costs? Yes. Because its a lot of expensive chemicals and lot of R&D to amortize.
- It is because of how much it costs to replace them? No, the replacement ‘price’ is what the company charges you. Their cost to the company is based on the production cost.
- Do consumers have to replace them? At some point in the battery's life they will need to replace them because batteries suffer from issues of battery creep, battery aging, etc.
- Or is it because people have been trying to build larger batteries to improve driving range? Larger batteries will obviously be more expensive to produce and to replace.
Cost to whom? To the end customer or the OEM or someone else? I may be wrong but I sense a lack of structure from the way your question is phrased.
In any case, as you´re rightly pointing out the two cases:
- It´s a cost to the OEM that they´re trying to optimize for their own margin (in line with performance to have a higher quality offering)
- It´s also a cost to the customer when it comes to replacement (since the OEM sells the car with an initial set of batteries)
In addition, there´s cost associated for all participants in the battery supply chain further upstream, including raw materials, manufacturing, R&D, etc. You´d have to be more specific with your question to identify the right approach.
Hi there,
You're grossly oversimplifying this. I highly recommend you do some research/reading around this topic (there is so much out there!)
First of all, noone is trying to build larger batteries! They are trying to build batteries that are smaller, have longer range, have faster recharge times, weigh less, and cost less.
Battery costs are a major component of electric vehicles costs for the simple reason that batteries are expensive! There are many rare earth materials (cobalt, lithium, etc.) and the layout is expensive. Bringing down battery costs are a key component of driving down EV costs.
- It's one of the most expensive components in a vehicle, so weights significantly in its price/cost.
- It's a significant part of the maintenance costs over the vehicle lifetime.
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