Why electric car prices could plummet by 2020

With lower battery prices for EVs and driverless car, 2020 could be a good year.

If car companies are true to their word, 2020 is set to be a good year. That's because numerous car companies -- including Nissan , GM, and Mercedes -- say they expect to have fully-driverless (or nearly-driverless) cars on the market by the end of the decade. Now, an executive of one of the largest lithium-ion battery makers in the world says that he sees the cost of expensive batteries used in electric vehicles decreasing by half by 2020, as the Wall Street Journal reports:

"We have an internal target to go down by at least a factor of two by 2020," said Prabhakar Patil, chief executive officer of LG Chem Power Inc., a division of one of the world's largest lithium-ion battery makers, LG Chem Ltd. "I am very positive in terms of the slope that I see."

But while it's a positive outlook, there will be some things that need to change before we can start seeing truly significant price cuts on EVs and hybrids.

Brian Kesseler, the president of Johnson Controls Inc.'s JCI Power Solutions division said cell costs may indeed fall by half, but overall costs of battery packs, which include the control systems that surround the energy source, are unlikely to decline that quickly without standardization across different auto makers.

Still, it's news that companies like GM and Tesla are betting on. Both say they are working on a long-range electric car that will sell for around $30,000 . Reducing battery costs will be key to making that a reality.

Read more: Wall Street Journal

Photo: Flickr/mrdavisdc

This post was originally published on Smartplanet.com