WSJ:

High Battery Cost Curbs Electric Cars
Unlike Other Devices, Power Packs May Not Enjoy Major Economies of Scale
The push to get electric cars on the road is backed by governments and auto makers around the world, but they face a big hurdle: the stubbornly high cost of the giant battery packs, which can account for more than half the cost of an electric vehicle.
Both the industry and government are betting that a quick takeoff in electric-car sales will drive down the battery prices. But a number of scientists and automotive engineers believe cost reductions will be hard to come by.
Unlike with tires or toasters, battery packs aren’t likely to enjoy traditional economies of scale as their makers ramp up production, the scientists and engineers say.
These experts say increased production of batteries means the price of the key metals used in their manufacture will remain steady — or maybe even rise — at least in the short term. They also say the price of the electronic parts used in battery packs as well as the enclosures that house the batteries aren’t likely to decline appreciably.
The U.S. Department of Energy has set a goal of bringing down car-battery costs by 70% from last year’s price by 2014.
Jay Whitacre, a battery researcher and technology policy analyst at Carnegie Mellon University, said in an interview the government’s goals “are aggressive and worth striving for, but they are not attainable in the next three to five years.” He predicted “it will be a decade at least” before that price reduction is reached.
Current industry estimates say the battery pack in the all-electric Nissan Leaf compact car coming out in December costs Nissan Motor Co. about $15,600.
That cost will make it difficult for the Leaf, which is priced at $33,000, to turn a profit. And it also may make the Leaf a tough sell, since even with federal tax breaks of $7,500, the car will cost about twice the $13,520 starting price of the similar-size Nissan Versa hatchback.

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