At Tesla’s ballyhooed Battery Day event last year, CEO Elon Musk set himself an ambitious target:

To produce a US$25,000 electric vehicle (EV) by 2023. Hitting that sticker price – about US$15,000 cheaper than the company’s least expensive model today – is seen as critical to deliver a true, mass-market product.

Getting there means finding new savings on technology – most critically the batteries that can make up a third of an EV’s cost – without compromising safety.

Alongside Musk, traditional automaking giants including Toyota Motor and Volkswagen are pouring tens of billions of dollars into the race.

1. WHY ARE EV BATTERIES SO EXPENSIVE? Largely because of what goes in them.

An EV uses the same rechargeable lithium-ion batteries that are in your laptop or mobile phone, they are just much bigger – cells grouped in packs resembling big suitcases – to enable them to deliver far more energy.

The priciest component in each battery cell is the cathode, one of the two electrodes that store and release electricity.

The materials needed in cathodes to pack in more energy are often expensive: Metals like cobalt, nickel, lithium and manganese.

They need to be mined, processed and converted into high-purity chemical compounds.

Read more: Why an electric car battery is so expensive, for now