.. in part due to assuming that the price of the internal combustion engine is "going to go up as a result of more stringent regulations especially regarding to particulate regulations", but also assuming that the battery (A) accounts for 50% of the sticker price today and (B) will drop by 77% by 2025. I wouldn't bet on these being the case (particularly on there being effective regulation in the US)
California can set the regulations independent of the Feds. That alone will be enough to change the market. This is why we have catalytic converters for example.
Even with mass production, the chemistry does not change. Limited Co supplies and a decreasing, but still present need for rare earths will only prop up prices.
Add to that new and exotic electrolytes and improved anode coatings, and it'll be a wonder if prices come down at all.
The existing battery packs have (vaguely) reasonable performance characteristics, I wouldn't think that manufacturers would adopt things that increase costs more than they increase performance.
(In fact I would expect them to mostly adopt things that cut costs without sacrificing performance)
we got a >50% reduction in price in last decade, while the chemistry stayed the same. Cost of materials accounts for a small fraction of the cost, and there's a lot more fat to cut in processing.
> but also assuming that the battery (A) accounts for 50% of the sticker price today and (B) will drop by 77% by 2025.
With the number of battery factories being built around the world I wouldn't discount it. Tesla, Daimler, and Panasonic, I wouldn't be surprised if there were other too.
Don't forget the sticker price includes a profit and both R&D + advertising costs etc. The leaf also has a rather anemic range. Run the numbers for a more reasonable 220+ mile range and battery's are going to near 1/2 the construction costs.
However, projections are notoriously non-predictive. If you had extrapolated the gasoline prices from 10 years ago, you'd expect that we'd be paying $10 a gallon, rather than almost half of what prices were then - even in raw dollars, ignoring inflation.
