The $100/kWh price was registered on e-bus batteries for the Chinese market. Although this was the lowest reported price, the volume-weighted average price did not strand too high either, setting at $105/kWh.

The recorded drop in price has been consistent, as the electric vehicle battery pack prices revolve around the $126/kWh mark for volume-weighted averages. However, when considering prices reported at cell-level, battery electric vehicle (BEV) prices were down to $100/kWh. Consequently, this show that 21% of the total price of a BEV is drawn by the battery pack.

BloombergNEF (BNEF) results on the 2020 Battery Price Survey is predicting an average battery pack price of $101/kWh by 2023 for all electric vehicle categories. This includes electric passenger vehicles, e-buses, commercial electric vehicles such as trucks, as well as stationary batteries.

The importance of $100/kWh batteries

It is obvious that as battery pack prices drop, electric vehicles will follow suit, becoming cheaper and  more affordable for the public. However, the $100/kWh marks a turning point for the electric automotive industry. It is by this point that automakers should be able to break even between combustion and electric vehicles.

In other words, by 2023 automakers should be able to build and sell both combustion and electric vehicles at the same price and with the same margin, allowing for a more balanced market.

Why Electric Car prices are dropping

Lower prices on battery packs are definitely a good sign. The main reasons for which battery packs are being sold at lower prices per kWh have to do with newer manufacturing technologies, but rather with demand.

Thus, lithium nickel manganese cobalt oxide batteries and their cobalt aluminum oxide counterparts are cheaper to the obsolete Li-Ion relatives. Lithium iron phosphate (LFP) batteries are expected to pull prices even lower, down to $80/kWh.

On the other hand, the constant increase of demand for battery packs also helps prices to keep on going on their descending slope.

Long-term expectations

If the $101/kWh by 2023 looks certain, even though some ups and downs may arise on the way, estimates show that by 2030 battery packs should reach a historical $58/kWh minimum. Compared to 2013, that is an 11.5-fold drop in price.

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Ducati, Lamborghini and Bugatti are currently in uncertain waters as the upcoming November meeting of VW’s board of directors will decide their fate. The decision came as Volkswagen is also looking to double its value, reaching approximately 200 billion euros.

As two unnamed senior executives declared for Reuters, the three exotic brands may go through restructuring, selling or other procedures in order to free up cash for the mainstream production.

Herbert Diess, Chief Executive Officer of Volkswagen is reportedly looking for ways to push even more billions into research and development of electric drives, moving away from combustion units.

Diess refused to comment on the fate of the high-performance brands but admitted the need for revamping of the VW brand to make the push towards the electric and autonomous automotive era.

In terms of revenue, Lamborghini managed to sell 4,554 units in 2019 with prices ranging from $200,000 up to a few millions for special edition models.

French luxury brand Bugatti released its newest model last year, called Divo. First unit was sold for a staggering $5.8 million and was one of the 84 vehicles Bugatti sold through 2019. Motorcycle brand Ducati managed to sell little over 53,000 units in 2019.

Since Volkswagen needs to rely on its combustion cars sales revenue to boost electric vehicles and autonomous research and production, difficult decisions need to be taken in regard to funneling the most amount of cash.

Recent leaked information surfaced of a potential sale of the Bugatti brand to Croatian electric supercar brand Rimac. In exchange for Bugatti, Volkswagen would acquire a larger share in Rimac and thus push forward with their efforts towards electrification.

Currently, Volkswagen owns 15,5% of Rimac and if negotiations succeed, the share would increase to 49%.

Although it has almost twice the number of employees, Volkswagen (78 billion euros) is worth roughly 2.5 times less than its main competitor Toyota (187 billion euros). The two automakers have almost identical sale figures in 2019, with Volkswagen taking the edge (10.96 million cars vs 10.74 million cars sold by Toyota).

With these figures in mind, it becomes clear that Volkswagen needs to take radical decisions in order to raise its market value. According to VW Group’s board chairman Hans Dieter Poetsch, restructuring and listing brands for sale is the right strategy.

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