One of the biggest hurdles masses are facing in switching to electric vehicles is their heavy price tag. The scarcity of cheap and affordable electric cars is what stops many from buying one. The starting range EV in the U.S. costs almost twice that of a conventional ICE car in the same segment.
However, over the next 5 years, electric cars and SUVs will be as affordable as gasoline vehicles, as per the recent BloombergNEF research.
What Will Make Electric Cars Affordable?
According to Bloomberg’s report, by the end of 2026, larger electric vehicles and SUVs will have the same production cost as ICE vehicles, and the small EVs will reach the threshold value in the subsequent year.
The decreasing cost of electric vehicle batteries will help in achieving this benchmark. As of now, the EV makers are planning to bring down the cost of electric vehicle batteries under $100 per kWh. This is being viewed as an important step towards attaining the goal.
Apart from this, a non-profit organization based in Brussels, Europe, revealed in its study that the EV battery cost would fall to around $58 between 2020 and 2030.
Furthermore, if researchers manage to produce a viable and stable solid-state battery that could match the abilities of a lithium-ion battery then it could also impact the cost.
So, in short, the manufacturing cost and the cost associated with producing EV batteries are what will affect the price of electric cars.
Also Read: Most Affordable Electric Cars In The World
How Much Will Electric Cars Cost After Five Years?
In Europe, the average price of a mid-size electric car is around €33,300 ($40,388) before the tax credits. Meanwhile, it’s €18,600 ($22,550) for petrol cars. According to the BloombergNEF study, in 2026, the cost of both is predicted to be €19,000 ($23,044).
The report says that for electric cars, the said price is even before EV incentives. However, with such a drastic drop in EV prices, it remains to be seen whether there would be any incentives offered in the future.
By 2030, the pre-tax price of the same electric car will further be reduced to around €16,300 ($19,770) while for gas cars it will remain pretty much the same.
The price of electric cars is crucial when it comes to attracting customers. This is indeed seen as a key milestone in transitioning from hydrocarbon fuels.
Apart from this, it’s the charging infrastructure and the driving range of EVs that hit the mindset of buyers. A well-developed charging network can even compensate for the average electric range of an EV.
Dr. David Bailey, professor of business economics at the University of Birmingham, said: “Once you are well over 200 miles per range, and you’ve got a really good charging infrastructure, it becomes a no-brainer. We’ve seen that in Norway.”
On the other hand, there are some countries that have electric cars over 200 miles, still they have very low sales volume due to poor infrastructure.
Hence, we can say that unless there’s a proper charging infrastructure people will hesitate in buying an electric car even if there are good EVs in the market. Good charging infrastructure is equally important for accelerating the adoption of EVs in the market.
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Via The Guardian