Ford's CEO reveals true cost of electric vehicle batteries

Speaking at a forum on green technology, Ford's CEO revealed how much electric vehicle batteries actually cost.

Speaking at a forum on green technology, Fortune magazine's Brainstorm Green conference in California, Ford's CEO Alan Mulally revealed how much electric vehicle batteries actually cost.

The high start-up cost of electric vehicles stems from the cost of its components -- namely, the construction and retention of power through electricity-based batteries. In general, car manufacturers have been reluctant to disclose the cost per kilowatt hour.

At the conference, using Ford's Focus Electric model as an example, Mullay indicated that the expense of battery packs for electronic vehicles can range between $12,000 and $15,000 per car.

"When you move into an all-electric vehicle, the battery size moves up to around 23 kilowatt hours. It weighs 600 to 700 pounds and they’re around $12,000 to $15,000 for a car that normally sells around $22,000. So you can see why the economics are what they are."

Based on the information provided by Ford's CEO, the manufacturer pays between $552 and $650 per kilowatt-hour for electronic vehicles including the Focus Electric, which contains a 23 kilowatt-hour battery pack. The retail price is currently $39,200.

According to Ford, the Focus Electric is able to go a distance of 76 miles on a single charge, and its 240-volt charger can replenish the car's battery in just over three hours. The U.S. Department of Energy has set manufacturers a target of reducing the cost of these batteries -- and therefore purchase cost to the consumer -- to approximately $300 per kilowatt-hour.

The electronic vehicle is based on the conventional gas-engine Ford Focus. Due to the traditional model's high volume of sales, the company states it can afford to sell small numbers of the EV, and high levels of electronic car production is not a current priority.

The first markets for the Focus Electric this spring will target New York and Californian customers. Ford sold 12 of the models to fleet customers in December and January -- and none in February and March, according to a Ford spokesman.

Reported by Bloomberg, electric vehicles now account for 3.4 percent of the U.S. light-vehicle market in this year's first quarter, up from 2.6 percent last year. Hybrid model sales fell to 2.2 percent, sliding from 2.4 percent in 2010 -- after peaking at 2.8 percent in 2009.

Image credit: Ford


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