Right, I'm not saying that cost parity is not important. It is an important milestone that marks a point of no return for ICE. But the $100/kWh is really overdone in the media. Here are a couple of reasons.
Price parity is different for every kind of vehicle. Specifically for commercial vehicles where 5000 cycle life is well utilized, price parity comes at a much higher cost per kWh than $100. For example, let's suppose the Tesla Semi really does cut 25 cents off of the cost per mile. This implies a savings of $250k over the 1 million mile warranted range. On a TCO basis then the parity price for the long range semi is up to $250k greater than $180k. For Tesla to market this at any $400k, a battery cost around $250/kWh would be quite cheap enough. But this is for TCO price parity. What of sticker price parity? To get there, the $180k Semi would need to be reduced to about $130k. To get there, Tesla would need to make batteries around $70/kWh. But is this really needed? At this price point, the Semi would save about 30c/mile rather than 25c/mile at the $180k price point. Does this really matter? Should truckers hold off buying a Tesla Semi until sticker price parity is obtained? Should Tesla hold back until this is possible?
My second point is that whatever vehicle price is low enough to generate sufficient demand is good enough to start. The key problem that I have with media fixation about $100/kWh is that it is usually framed as a critical event for demand. That material demand for EVs just is not there until EVs are at sticker price parity. Viewing above parity batteries as a barrier to demand is just plain wrong. Specifically it is the demand for EVs at a premium to ICE that is helping to drive the supply chain efficiencies needed to get to $100/kWh. Without this demand for premium EVs, it would take much, much longer for subparity EVs to arrive. This is the basic mistake that all the OEMs have been making. They will only make as many EVs as the law requires them too, until batteries are subparity. That path is way too slow. Tesla has cultivated enough demand above parity to really advance the technology and gain scale. In so doing, they will hit sub $100, many years ahead of the bulk of OEMs. The Chinese will hit it quickly too. Any OEM waiting for $100 batteries to arrive will be a loser in the EV race.
So the really critical action happens before sticker price parity is reached. The EV makers that get there first and vehicles that excite consumer demand for premium EVs matter most. Right now I think product diversity, not price and not battery price, is the key to demand cultivation. There are too many vehicle segments that just don't have enough EV products to choose from. OEMs sitting on their hands waiting to cheap batteries is the problem.
