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A cheap EV battery (B-1) has a lifetime of 4 years (no salvage value after that). The cost of this battery at year-1 is $1,000.

A cheap EV battery (B-1) has a lifetime of 4 years (no salvage value after that). The cost of this battery at year-1 is $1,000. A high-performance B-2 has a lifetime of 8 years (no salvage value after that). The cost of this B-2 at year-1 is $3,000. Assume the EV lifetime is 16 years. Assume the currency inflation rate is 10%. Battery is only bought and replaced when needed. Which battery will you buy and why?

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