Carbon fiber is expected to increase its importance as a lightweight substitute material. The significant market potential in the automotive industry is strongly dependent on carbon fiber cost. A decrease of about 50% from the present cost level of polyacrylonitrile (PAN)-based carbon fibers is needed. This ambitious target is only achievable with high-cost transparency in the production chain. This paper reviews published cost models and identifies the need for a consistent methodology and transparency over input parameters. A new cost model with a modular structure covering all process steps by cost type and disclosing all process parameter assumptions is introduced. The most cost-intense steps are polymerization, including raw material (25%), carbonization (22%) and fiber washing after coagulation (19%). Most important cost types are energy (34%), raw material (19%) and capital costs for equipment (18%). The high-cost share of 54% for carbon fiber PAN precursor is consistent with most reviewed models.