They'll never be free. They'll never be cheaper than the raw materials that go into them, or the copper to wire them together and into the car.
At some point, there's going to be a price floor that the research, materials supply and competition simply won't break through.
Guessing when that is going to happen is more luck than anything. I do not see it continuing to get exponentially cheaper for long, though.
LiFePho has removed most of the precious metals out of the equation, and the demand for electric cars will continue to compete against the growth in demand for battery storage for renewables. For an analogy, lumber prices have shot through the roof over the past few years where I live due to construction booms. Nothing about the technology has changed, and supply hasn't fluctuated greatly. These same pressures are going to be pushing against lithium batteries getting exponentially cheaper over the next few years. I don't doubt that they will find room to bring prices down, but there is a floor out there somewhere close by.
I wouldn’t anticipate suddenly hitting a price floor, but instead the rate of reduction tapering off, which we’re not seeing yet in a clear way. There’s still a long way to go before we hit the limits from resource costs. And the current rate doesn’t need to continue for long before we start hitting price parity. In some cases we’re already there.
There's a floor but it's not just price of raw materials. It includes performance of same raw materials just used better. So a battery today with X amount of raw materials puts out Y power. A battery in 10 years with the same amount of X raw materials puts out Y^4 power. At least according to E=MC^2 it's a long way before we reach the floor.
Well, the theoretical floor is much further if one goes beyond Lithium. There are various prototypes that oxides aluminum potentially reaching energy densities greater than gasoline. Now, those are currently only reversible in the sense of using aluminum smelter to restore aluminum from the oxidized form. Still we do not know if reversible process is not possible at all in a compact device and the supply of aluminum is vast.
The paper says "We estimate that between 1992 and 2016, real price per energy capacity declined 13% per year". Where do you get your data for the last 5 years?
Regardless, 1 year isn't the correct duration for a bet. People average owning a car for ~6 years, and the average lifespan is something like 12 years.
But depending on terms, I might take a year-over-year bet for battery prices. Demand is high and the pandemic has caused significant supply chain problems. They could well have gone up this year. And indeed, a quick look at news reports suggests key components, including lithium and cobalt, are surging in price. Fine examples of why assuming a historical average has future meaning can get you into trouble.
One kWh of batteries generally requires around 200g of lithium. Both by weight and price it's a crucial, but small component, so unless it suffered a 10x hike, its price isn't relevant.
Meanwhile LiFePO4 batteries, which are currently the most popular chemistry(at least in China), contain no cobalt whatsoever.
Other analysts differ on whether these things will impact the retail price. But you make my point for me: this is an extremely complex problem, and making any simple assumption about future price is a mistake.
At some point, there's going to be a price floor that the research, materials supply and competition simply won't break through.
Guessing when that is going to happen is more luck than anything. I do not see it continuing to get exponentially cheaper for long, though.
LiFePho has removed most of the precious metals out of the equation, and the demand for electric cars will continue to compete against the growth in demand for battery storage for renewables. For an analogy, lumber prices have shot through the roof over the past few years where I live due to construction booms. Nothing about the technology has changed, and supply hasn't fluctuated greatly. These same pressures are going to be pushing against lithium batteries getting exponentially cheaper over the next few years. I don't doubt that they will find room to bring prices down, but there is a floor out there somewhere close by.