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Transport electrification: the effect of recent battery cost reduction on future emission scenarios

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Abstract

Although the rapid fall in the costs of batteries has made electric vehicles (EVs) more affordable and boosted their sales, EVs still account for only a fraction of total car sales. In the last years, the battery costs of electric vehicles have dropped faster than previously estimated in the empirical literature. As a result, future cost projections have been adjusted. The larger than expected reduction in costs also shows the uncertainty of battery cost development, which will affect the success of a transition to low-carbon transport. Integrated assessment models show that reducing greenhouse gas emissions is more challenging in the transport sector than in other sectors. Switching to EVs could significantly reduce passenger road-transport emissions. In this study, we test the sensitivity of the projected sales of EVs to different battery costs and climate policy futures. The model suggests that the effectiveness of policy incentives will strongly depend on the battery floor costs, as EVs only gain significant shares (15% or more) of global car sales within our model framework when battery costs reach 100 $/kWh or less. We therefore conclude that besides the pace of the battery costs decline, which has been rapid in the last years, it is important to understand the lower boundary of battery costs for modelling long-term global energy transitions.

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Funding

The research leading to these results received funding from the European Union’s Seventh Framework Programme FP7/2007-2013, under grant agreements 308329 (ADVANCE) and 603942 (PATHWAYS).

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Authors and Affiliations

  1. PBL Netherlands Environmental Assessment Agency, Bezuidenhoutseweg 30, 2594 AV, Den Haag, The Netherlands

    O. Y. Edelenbosch, A. F. Hof & D. P. van Vuuren

  2. Department of Management and Economics, Politecnico di Milano, Via Lambruschini 4/B, Milan, Italy

    O. Y. Edelenbosch

  3. Copernicus Institute of Sustainable Development, Utrecht University, Princetonlaan 8a, 3584 CB, Utrecht, The Netherlands

    A. F. Hof & D. P. van Vuuren

  4. Stockholm Environment Institute, Linnégatan 87 D, 115 23, Stockholm, Sweden

    B. Nykvist

  5. Department of Management Technology, and Economics, ETH Zurich, Weinbergstrasse 62, 8032, Zurich, Switzerland

    B. Girod

Authors
  1. O. Y. Edelenbosch
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  2. A. F. Hof
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  3. B. Nykvist
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  4. B. Girod
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  5. D. P. van Vuuren
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Corresponding author

Correspondence to O. Y. Edelenbosch.

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Edelenbosch, O.Y., Hof, A.F., Nykvist, B. et al. Transport electrification: the effect of recent battery cost reduction on future emission scenarios. Climatic Change 151, 95–108 (2018). https://doi.org/10.1007/s10584-018-2250-y

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  • DOI: https://doi.org/10.1007/s10584-018-2250-y

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