Today’s Reader Question:
I have a question regarding the cost of replacement of the battery in BEV’s available in Australia, and the manufacturer advised life before replacement is necessary? This topic is a key consideration that lots of buyers are concerned about before buying a BEV.
Hi Andrew, yes, the question of when to replace an EV battery, and the cost involved is important – but perhaps not quite as much as the general public may think.
First-up: I will split the question into two parts.
- What is the likelihood of the battery needing replacement during the life of the car?
- What is the cost of any potential battery replacement?
Will a battery need replacing during the life of the car?
To answer this question, one needs to explore two issues:
- When will the battery no longer be ‘fit for purpose’? and
- How long is the ‘life of a car’?
First of all, a good proportion of manufacturers guarantee their batteries for at least 70% capacity remaining after 8 years. For a Hyundai Kona with 450- 500km range around town, that equates to a minimum range of 315-350km at 8 years of age.
For many, if not most people – that means charging perhaps twice a week instead of once every week. The same for longer distance travel – maybe an extra couple of recharge stops on the way between Sydney and Brisbane for instance.
It is also important to realise that the battery will not be ‘dead’ at that 8 year mark, merely reduced in the driving range it can offer.
Mind-you, the smaller the battery pack, then that loss can be more of an issue. For instance, early Nissan Leafs only had a 120km real-world range. This means in the 8 year warranty period it could drop to 84km and not qualify for a warranty replacement.
By now the oldest Leafs here are 11 years of age and, at that rate of decline, their range could have dropped to 70km. (Even lower in winter, and/or if using the heating/air-conditioning system). That’s definitely replacement time if you use it for more than a short commute to the local shops!
On the other hand, whilst many early (2011 – 2014) Leafs did decline at those (or worse) rates, modern EV batteries (with improved battery chemistry and thermal management systems) do not seem to decline anywhere near as quickly – so these range decreases are worst-case scenarios.
In fact, a 2019 study by Geotab (https://www.geotab.com/blog/ev-battery-health/ ) of around 6,000 EV owners found that EVs lose on average 2.3% capacity annually and maintained “high levels of sustained health” over long periods of time.
To quote the report: “If the observed degradation rates are maintained, the vast majority of batteries will outlast the usable life of the vehicle.” Given that was an average that included lots of early EVs – using their online tool to isolate different models shows many later ones exhibiting significantly lower than average degradation rates.
Summing up part (a): for people buying current model EVs with their larger batteries, most will find it is likely to be 10 years or more before battery replacement becomes a consideration.
Furthermore, that EV may then be relegated to the second car doing local trips as the previous ICE car finally fades away/the kids grow up etc. Used for day-to-day driving, it is likely that it will be some years past the 8 year warranty period (if ever) before really needing a new battery.
How long is the ‘life of a car’?
So when will the electronics, suspension, steering and interior of an EV be ‘worn out’ enough to say the car has reached the end of its usable life?
Given the average age of the Australian car fleet is 10.6 years (2020 – 2021 Australian Bureau of Statistics), 20 years seems a reasonable guess – and was a number I heard recently to explain why we should be setting 2030 as the latest date for banning new ICE car sales if we hope to reach net zero emissions by 2050.
So, to answer question (a) above, it seems reasonable to say:
- an EV may never actually need a battery replacement;
- if it does it will need no more than one battery replacement in its life and
- if replacement is required, the earliest it will happen is at or after 10 years.
What will be the cost of any potential battery replacement?
In the early days of the Nissan Leaf, horror stories abounded about fast battery declines and $30,000 plus battery replacement costs. These turned out to be unnecessary worries. Batteries that did decline faster than they should have were replaced for free within the 8 year warranty period.
Now that the 8 year warranties have run out we find that the cost of a replacement battery fitted by a dealer has thankfully reduced to around $10,000 for the 24kWh battery.
Also, as failed battery packs were returned to the factory, it was found many of these packs had only a couple of faulty cells with the remainder being fine.
As a result, in countries with higher numbers of early Leaf sales (i.e. not here in Australia) – battery recycle schemes have begun with the disassembly and repackaging of cells into guaranteed remanufactured battery packs. In Japan, rebuilt packs for a ZE0 or AZEO Leaf sell for around US$2900 (around Au$4000).
In addition, as these cars fall off the road due to accidents – a ready supply of second-hand batteries are becoming available to private businesses to experiment on. As a result, some have started offering aftermarket replacement (in some cases upgraded) battery packs*.
Meanwhile, the major cost component of a BEV – the battery, has been falling in price in much the same precipitous way that solar panel prices fell in the early 2000s. In 2010, EV battery prices were up around US$1100 per kWh, but have now fallen to US$137/kWh. (See graph 1. Note US dollar amounts used).
It is predicted that the key number for BEV and ICE price parity to occur is US$100/kWh, and 2024 is the likely date that will start to happen.
Looking at graph 1 – if the cost per kWh is already US$137, with BNEF predicting it will hit US$58/kWh by 2030, it seem that when the current crop of EVs may begin to need new batteries, a price of around US$4000 ($A5,400) for a 64kWh Kona battery pack is likely.
This would be in line with the prices and falls seen in graph 1 if applied to the original Leaf.
However – to come back to the answer provided for part (a) of this question: that battery is unlikely to need replacing then. In fact it may very well last for the useful life of the car. Tesla for instance are suggesting that ‘the million mile battery’ (one that last for a million miles – which equals 1.6 million kms) is not too far away.
To sum up:
- EV batteries do not die every 8 to 10 years;
- by 2030 new battery prices are likely to be comfortably under $10,000 for a Kona and perhaps around $5400 (with reconditioned unit prices significantly lower again) AND
- it is possible that an EV battery may never need to be replaced within the lifetime of the car.