news

Price parity between electric and internal combustion cars predicted by 2024 – Nissan

The plummeting costs of battery production could see electric vehicles match internal combustion prices by the middle of next decade


Electric vehicles will become more affordable, and possibly even become cheaper than conventional internal-combustion engined cars, and it's on track to happen as soon as 2024.

That’s according to research conducted by Morgan Stanley and cited by Nissan’s global head of electric vehicles, Nic Thomas, at last week’s Nissan Futures seminar in Hong Kong.

The research suggest the costs of batteries will continue to decrease, while the cost for manufacturers to ensure their internal combustion vehicles meet ever-more stringent emissions standards will continue to rise.

Currently, batteries for electric vehicles cost between US$210-$230 per kWh to produce, down from US$1000 per kilowatt hour as recently as 2010. But that price is projected to fall even further to around US$100 per kWh by 2024, according to the research.

When combined with increasing costs associated with the production of ever more efficient ICE powertrains, the tipping point could come in 2024, according to the research conducted in 2018.

“They estimate in 2024, in Europe, so where you have European emission regulations, you’ll get a crossover where batteries will come down below US$100 per kilowatt hour, and the price of NOX and CO2 and these things which is driving up the price of petrol and diesel engines will crossover,” Thomas told CarAdvice at the Nissan Future seminar.

“We’re actually more confident than that. We see in the products we’re developing for the early 2020s, we would expect to see that crossover. There are many different factors involved in that. What that means is that the product we might be able to launch in the early 2020s will be a beneficiary of that lower price.”

Thomas was careful, however, to avoid suggesting the price of electric vehicles would fall below similar ICE cars.

“It doesn’t automatically mean the EV itself will be as cheap as the cheapest petrol car you can buy today,” said Thomas. “It’s still a big battery, it’s still at the same time, as the cost per kilowatt hours is coming down, the demand for bigger batteries is going up.”

But while the future for cheaper electric vehicles may look rosy, with lower battery prices potentially pushing the price down and to parity with ICE vehicles, market analysts have urged caution.

Batteries use a lot of natural resources, raw materials such as nickel and lithium, that are prey to market fluctuations.

“Auto producers and battery makers are very sensitive to raw material costs,” wrote Natasha Kaneva, head of metals research and strategy at J.P. Morgan.

“Proportionally, the cost of raw materials will increase over time relative to the total cost of the battery pack. In fact, if total battery pack prices drop from $209/kWh to $100/kWh, but raw material costs stay the same, the raw materials cost would account for 56 per cent of the price, substantially higher than today’s 27 per cent.”

Nevertheless, J.P. Morgan’s research indicates “In Europe, plug-in electric vehicles (BEVs and PHEVs) will rise from roughly a 2 per cent share of total new sales in 2017 to around 9 per cent by 2025, nearly eclipsing 1.5 million vehicles by the middle of the next decade. A dramatic move away from ICE-only vehicles is expected and by 2025 only plug-in electric vehicles and HEVs will likely be sold.

“Meanwhile in the U.S., tougher fuel economy regulation will likely push automakers to expand their EV offerings, but not with the same degree of urgency as in Europe, where there are looming carbon dioxide emissions targets and fines. Nevertheless, overall EV sales – including BEV, PHEV and hybrids – are estimated to account for over 38 per cent of total sales in 2025.”

Nissan, which has sold 400,000 Leafs since its launch in 2010, is in the middle of a rapid expansion of its EV plans with eight models promised by 2022.

“If you look at our mid-term plan, we’ve said we’re going to build eight battery electric, zero emissions vehicles by 2022, which is not very far away in car company terms,” said Thomas, adding Nissan had already previewed its EV future with the IMQ, IMS and IMX concept cars.

MORE:Nissan Showroom
MORE:Nissan News
MORE:Nissan Reviews
MORE:Search Used Nissan Cars for Sale
MORE:Nissan Showroom
MORE:Nissan News
MORE:Nissan Reviews
MORE:Search Used Nissan Cars for Sale
Rob Margeit

Rob Margeit is an award-winning Australian motoring journalist and editor who has been writing about cars and motorsport for over 25 years. A former editor of Australian Auto Action, Rob’s work has also appeared in the Sydney Morning Herald, The Age, Wheels, Motor Magazine, Street Machine and Top Gear Australia. Rob’s current rides include a 1996 Mercedes-Benz E-Class and a 2000 Honda HR-V Sport.

Read more about Rob MargeitLinkIcon
Chat with us!







Chat with Agent