Electric Cars: Why Are They So Expensive?

Moneybox
A blog about business and economics.
April 18 2012 8:35 AM

Electric Car Batteries Are Very Expensive

Speaking at a forum on green technology on Monday, Ford Motor Co. chief executive Alan Mulally indicated battery packs for the company's Focus electric car costs between $12,000 and $15,000 apiece. "When you move into an all-electric vehicle, the battery size moves up to around 23 kilowatt hours, [and] it weighs around 600 to 700 pounds," Mr. Mulally said at Fortune magazine's Brainstorm Green conference in California.
"They're around $12,000 to $15,000 [a battery]" for a type of car that normally sells for about $22,000, he continued, referring to the price of a gasoline-powered Focus. "So, you can see why the economics are what they are."
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This is bad news for the world. If you look at the mobile computing space, precisely the area in which you don't see breathtaking innovation is this battery stuff. We're just not getting better at the basic physics of storing electricity in a reasonably compact way. Battery life for things like smartphones and laptops has improved, but that's all coming as improved efficiency of the chipsets. But here, too, the basic physics of translating engine power into forward automobile motion are not amenable to enormous improvements. You could of course make the car lighter, but for whatever reason this is the fuel economy measure that dare not speak its name. If you look to Europe where gasoline prices are much higher, however, you'll find that the median commuter long ago responded by owning a lighter car. American politicians have tended to tout electrification as a kind of high-tech alternative to efficiency-by-mass-reduction but to an extent the same basic issue recurs. 

Now, that said, expensive batteries don't mean that electric cars are doomed forever. When you read these stories about how robots are going to take all our jobs, you're reading stories about life in a world of material plenty. Fifteen grand is a lot of money, but if the price of everything that's not a gigantic battery starts tumbling under the force of automation then people will just own very expensive batteries.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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