Ford (NYSE:F) has revealed that its electric car which normally sells for around $22,000 has a battery pack costing between $12,000-15,000. The company’s Focus electric cars have a 23 kilowatt hour battery pack which weighs around 600 – 700 pounds. This represents the major impediment which lies in pricing electric cars economically. The per kilowatt hour cost of battery packs is around $522-675. This has traditionally been a number which battery manufacturers and auto OEM’s have been reluctant to disclose in a bid to preserve their pricing power. 
Ford competes globally with automakers like BMW (GR:BMW), GM (NYSE:GM),Daimler (ETR:DAI), Audi (NSU:GR), Honda(NYSE:HMC), Toyota (NYSE:TM) and others. We have a price estimate of $16, which is around 25% above the current market price.
The efforts made by battery manufacturers such as Johnson Controls, Exide Industries and Magna International emphasize increasing the energy density of the batteries in order to bring down the cost of battery per kilowatt hour to around $300. The Department Of Energy has helped to fund battery plants in the U.S. to increase capacity in an effort to support these developments. The United States Advanced Battery Consortium (USABC), a consortium of leading automotive players like Ford (NYSE:F), General Motors (NYSE:GM) and Chrysler Group has recently awarded Johnson Controls (NYSE:JCI) with a $5.48 million energy lithium ion battery technology development contract. This contract is being funded jointly by the U.S. Department of Energy and Johnson Controls.
We currently have a Trefis price estimate of $38 for Johnson Control’s Stock, around 19% above the current market price.
The electric vehicles market has been suffering from slow sales and increasing costs. However, in spite of that, all the automotive OEM’s are coming out with new cars in this space which offer incremental benefits and innovation. Ford’s New Focus is a direct competitor to Nissan’s Leaf which has already been in market for quite some time now. While Nissan offers a mileage of 73 km, Focus offers a mileage of 76 km and recharging in 3.5 hours. General Motors is planning on launching its new all-electric Spark subcompact later this year.Notes: