The transition to full electrification is still likely a few decades away. However, in this video clip from "The High Energy Show" on Motley Fool Live, recorded on April 5, Fool.com contributors Travis Hoium and Jason Hall explain how the cost of lithium-ion batteries has come down so rapidly in the last couple of years that it may lead to faster implementation.
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Travis Hoium: The other thing I think is important to put into context in some of these discussions too is the trajectory of costs. This is from Bloomberg New Energy Finance. This is the cost of lithium-ion batteries, which is most of what we use not only in electric vehicles but for energy storage in the U.S. right now. If you put a storage system in your home or in a commercial building like STEM, it's primarily going to be a lithium-ion.
The cost of these has come down almost 90%. This chart goes to 2018. A lot of times the data that we get on these is a couple of years old, which is always kind of frustrating but coming down extremely rapidly. I remember talking to executives in this 2012-2013 range and them saying, well, we should be able to get to $300 per kilowatt-hour in the next 5-10 years.
Jason Hall: We're probably half that now.
Hoium: We're under $100. I think Tesla (TSLA 5.93%) said they passed the $100 number a couple of years ago, and I think everybody's under that now. So costs are coming down extremely rapidly, not only for batteries but everything else. Solar is coming down, hydrogen is coming down. Hydrogen is one of these weird things, we'll talk about this later in the show, but it's not quite there from an economic standpoint, but it's getting close, and so that opens up, is there a business there that can be sustainable long-term? We'll see.
But I just wanted to put some of those things into context as we discuss electrifying everything, and is it possible? I think to me, the answer is over the next 20 or 30 years, absolutely. If we were making this transition over the next three years, the answer would be probably no [laughs] because it is a big change.