EVs on Track to Becoming Cheaper than Gas-powered Cars by 2025
【Summary】The report highlights that the adoption of EVs will help support this emerging trend. By 2025, EVs could make up around 14 percent of new car sales, which equates to roughly 100 million units. In Europe, regulations surrounding a ban on old diesel-powered vehicles may propel this forecast by a couple of years.
Electric cars are projected to make life easier, as well as cheaper to acquire. According to a report published by Bloomberg New Energy Finance, EVs will be less costly to purchase than traditional gas powered cars by 2025.
There are numerous factors driving this trend. Battery costs are expected to nose dive by a whopping 77 percent within the next 12 years. Considering that a large part of the overall cost of manufacturing EVs is the power cell, any price shift related to the main component will have a direct impact on the future of EV pricing.
The report highlights that the adoption of EVs will help support this emerging trend. By 2025, EVs could make up around 14 percent of new car sales, which equates to roughly 100 million units. In Europe, regulations surrounding a ban on old diesel-powered vehicles may propel this forecast by a couple of years.
As adoption is a vital aspect to price reduction, better battery technology will likely lure conventional, internal-combustion engine car owners into the world of sustainable transportation. This includes more robust ranges exceeding 400+ miles, the current standard set by the Fisker EMotion.
Pressure from the government to produce more efficient fuel-powered cars may have a compounding effect on EV adoption. At some point in development, automakers will trade in their gas-powered vehicles for EVs due to high manufacturing costs. When this happens, more EVs will enter the market at a rapid pace.
"And of course, as EVs become cheaper and sales begin to boom, sales of conventional vehicles will falter. The economies of scale that car companies have long enjoyed with combustion-engine vehicles will disappear, causing their prices to climb. That vicious circle will make EVs even more competitive," explained Richard Read from The Car Connection.
Cost of Ownership
From a cost of ownership perspective, EVs are less time consuming and costly to own, compared to fuel-powered units. Without the need to perform periodic oil changes, engine cleaning and fluid top ups, individuals can save a staggering 35 percent per year on maintenance. When it comes to charging costs, EVs offer even more savings for owners. The important thing to note is that electricity costs vary from location to location, as well as the time one is using power.
"For consumers primarily interested in driving an EV to save money, it's critical to know actual electricity rates (and the current cost of gasoline, for comparison purposes) instead of relying on national averages," said Carroll Lachnit, Features Editor at Edmunds.
In Washington state, the per kilowatt-hour average cost is 8.6 cents, while in Hawaii, the same amount of electricity costs 37 cents. For a 2013 Nissan Leaf, this equates to roughly $25 per 1,000 miles in Washington state and $107 per 1,000 miles in Hawaii. The EPA standardizes the cost of electricity for EVs at 12 cents (kilowatt-hour average).
According to UBS, some regions of the world are still waiting for EV cost ownership to decrease below traditional, fuel-powered cars. In Europe, this milestone is expected to arrive next year.
Michael Cheng is a legal editor and technical writer with publications for Blackberry ISHN Magazine Houzz and Payment Week. He specializes in technology business and digesting hard data. Outside of work Michael likes to train for marathons spend time with his daughter and explore new places.
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