Electric cars will cost the same to make as conventional cars, with internal combustion engines, by 2024 and an acceleration in the shift away from fossil fuel vehicles may be imminent, according to new research.
The extra cost of manufacturing battery electric cars versus their fossil fuel equivalents will diminish to just $1,900 (£1,470) per car by 2022, and disappear completely by 2024, according to research by the investment bank UBS. The research is based on detailed analysis of batteries from the seven largest manufacturers.
Reaching cost parity with the internal combustion engine (ICE) is seen as a key milestone in the world’s transition away from burning fossil fuels.
Big carmakers have been reluctant to shift production away from their profitable internal combustion engine models towards electric cars because of expensive batteries, which are almost exclusively made by east Asian companies such as South Korea’s LG Chem, Japan’s Panasonic and Chinese rival CATL. Batteries account for between a quarter and two-fifths of the cost of the entire vehicle.
UBS said it expected battery costs to drop to below $100 per kilowatt hour (kWh), a key milestone, by 2022.
The bank said that those carmakers that try to hang on to ICE sales risk being left behind by rivals such as Tesla and Volkswagen, the world’s largest carmaker by volume, which has committed to investing €33bn in selling electric cars. Read More