With battery technology and prices lagging behind the market, electric vehicles have not quite taken off in the big way some automakers hoped. But battery prices are falling, though perhaps not as quick as some automakers and EV enthusiasts might hope. A new study by Pike Research finds that by 2017, the cost of a lithium-ion battery pack could drop by as much as ⅓.

With many battery packs ranging in price from $7,000 to $10,000 (or more!), a 33% drop in price would be a boon to EV buyers. But it would still leave battery-powered cars with a price premium over conventional cars. And that’s not necessarily a bad thing. Americans tend to want what the wealthiest of us have, and green vehicles, especially EV’s, have become popular with the rich and famous.

Pike Research predicts that by 2017, the $2 billion-a-year market for lithium-ion batteries will have exploded to over $14 billion as electric vehicles gain popularity and battery prices fall thanks to new research and breakthroughs in cost reduction. By 2017, Pike predicts that the cost of an installed battery will be about $523 per kWh. Depending on the automaker, price per kWh varies. Tesla Motors charges about $36,000 to replace its 53 kWh battery pack, which brings the cost to about $679 per kWh. If Pike’s study is to be believed. the price of the Tesla pack should drop by almost $10,000, to around $27,000, by 2017.

However, Pike also predicted that battery prices would drop to just $470 per kWh by 2015, so this is obviously a less-rosy picture of lithium-ion batteries…though perhaps a little more realistic. But it also means that we are still years away from the magical $200 per kWh price that many analysts (including Tesla CEO Elon Musk) see as the “breaking” point in EV vs. conventional car prices. At the rate of battery prices that Pike is presenting, it could take until 2025.

2017 is only 5 years away…but will the passion for electric vehicles still be here half a decade from now?

Source: Green Car Congress