Envision Group analysts discovered the price curve after purchasing Nissan’s battery division, Envision CEO Lei Zhang said. Getty photoGETTY

Envision Energy will produce batteries for $100 per kilowatt hour by 2020, the Shanghai company’s founder and CEO said at Stanford University, predicting the price will drop to $50 only five years later and end the reign of the internal-combustion engine.

Envision’s analysts realized they could achieve these goals after the company purchased Nissan’s battery division earlier this year, CEO Lei Zhang said at Stanford University’s Global Energy Forum. Stanford just released video of Lei’s remarks, which came in response to a slightly more conservative prediction by Stanford’s Arun Majumdar.

“I have something to add on to Arun’s comment,” Lei said. “He mentioned by 2022 we are able to reach $100 per kilowatt hour, but I say we are able to arrive much earlier. By 2020 we are able to deliver the cost of $100 U.S. Just recently we bought a Japanese battery company, so we have very detailed analyzed this trend of cost, so we are able, probably by 2025, to achieve $50 U.S. dollar per kilowatt hour.”

​Majumdar, a former head of ARPA-E who co-directs the Stanford Precourt Institute for Energy, had opened the conference with this prediction:

Within the next five to seven years, the cost of a battery pack will likely reach $100 a kilowatt hour. Why is that important? Because at that cost, electric vehicles will reach cost and range parity with gasoline cars without subsidies. And you give it another 15 to 20 years and we’re likely to see deep penetration of EVs around the world, and with no tailpipe emissions, EVs will reduce air pollution, which is a major problem in many cities around the world. After 100 years of gasoline-based automobiles, this is a tectonic shift.

​Envision is a global provider of wind turbines and energy management software. Lei predicts fossil-fuel cars will disappear “overnight” when EVs become cheaper.

“Your capex on the EV is going to be much cheaper—20 or 30 percent cheaper than the diesel car. So overnight, people are going to change because it’s a consumer market.”

The Chinese purchase 30 million cars per year, he added, so the greater challenge will be managing the impact of that many EVs on the energy system.

“If all these cars charging at the same time, or even say charging randomly, it’s a big headache for the utility, for the grid. So that’s why IOT plus AI–that’s why I say AIOT–is going to be critical for the future: to help you distribute this charging, discharging, balancing the grid, and also taking into account the weather pattern. It’s a very sophisticated system. You need AI to solve that.”​

Via Forbes