Electric vehicles are expected to become cheaper to produce than conventional fossil fuel-powered cars by 2027, new research has found.
Price parity between electric and petrol/diesel cars is one of the major hurdles towards wider electric vehicle (EV) adoption and it looks likely to come sooner than expected, at least for Europeans.
The report also suggests that, while some regions have made great strides in regard to emissions regulations and bans, tighter regulations worldwide could see electric vehicles dominate all new car sales by the middle of next decade.
Using European-based figures, the current retail price of a medium-sized EV is €33,300 (AU$52,000) compared to a same-sized, petrol-powered car for €18,600 (AU$29,000). Both these cars should cost about €19,000 (AU$29,700) by 2026.
Beyond that, by 2030 the same electric car is forecast to cost €16,300 (AU$25,500) in comparison to the petrol car which should increase to €19,900 (AU$31,100).
As manufacturers create space within their factories for dedicated EV production lines, greater economies of scale mean that EVs are set to become more affordable than their internal-combustion counterparts within the next six years. Additionally, batteries are becoming less expensive to manufacture, leading car makers to pass on reduced costs to end buyers.
However, even BloombergNEF’s 2026-7 anticipation is one of the more conservative estimates – The Guardian reports that investment firm UBS expects electric cars will cost the same to manufacture as their petrol counterparts by 2024.
In any case, trend lines are going down for the price of batteries at an accelerating rate.
A study commissioned by European-based non-profit Transport & Environment predicts that battery prices will fall by 58 per cent within the next decade. That could bring battery prices down to $58 per kilowatt-hour (kWh) – much lower than the current $100 per kWh price.