The big obstacle on global auto industry’s road to an electric future

The lithium-ion battery is a complex industrial product, not just another component in the consumer electronics supply chain. This inconvenient truth is a major obstacle on the global auto industry’s road to an electric future.

Cutting the cost of batteries is arguably the industry’s most urgent challenge. They account for a huge chunk of the cost of an electric car—between 35% and 45%, according to McKinsey. Unless costs fall, most consumers will continue to prefer cheaper traditionally powered cars and manufacturers won’t hit strict carbon-emissions targets set by the European Union and China—two of the world’s big three auto markets. This will trigger crippling fines.