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EVs Won't Become as Cheap as Regular Cars to Build Until 2024

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【Summary】According to a report by The Guardian, automakers will be able to manufacture electric vehicles that cost the same as vehicles with internal combustion engines by 2024.

Original Vineeth Joel Patel    Oct 24, 2020 7:10 AM PT
EVs Won't Become as Cheap as Regular Cars to Build Until 2024

Modern electric vehicles are expensive for one simple reason – they're expensive for automakers to build. There are many more explanations, like how the materials that are used to make electric batteries are hard to find, automakers are packing EVs with cutting-edge tech features, and automakers are charging extra because of having to manufacture a bunch of large components (chassis, electric motors, batteries, etc.). As automakers manufacture more EVs, prices will naturally start to fall. Apparently, that drop is right around the corner.

Prices For EVs Set To Fall

According to a report by The Guardian, automakers will be able to manufacture electric cars that cost just as much as vehicles with only an internal combustion engine by 2024. 

The outlet claims that by 2022, the extra cost of manufacturing pure EVs directly against vehicles that run on fossil fuels will shrink to $1,900 before disappearing in 2024. The outlet's report cites research conducted by UBS, an investment bank, that's based on a detailed look at batteries from seven automakers.

When electric vehicles cost the same amount as fossil-fuel powered ones, experts believe EVs will become more popular options with consumers. At the moment, price is one of the major factors stopping consumers from making the switch. Automakers aren't interested in going all-in on EVs until they're able to make or procure affordable batteries. 

As far as batteries are concerned, UBS believes that costs will hit the necessary $100 per kilowatt-hour (kWh) mark for electric vehicles to become nearly as affordable as their internal combustion counterparts by 2022.

Falling Behind Will Be Costly

Investing in EVs certainly isn't cheap, but the outlet claims that automakers that cling onto their internal combustion engines will risk falling too far behind competitors. Tesla has a huge jump on every traditional automaker, which explains why the brand has EVs with the most range on the market. Other brands are stuck in the 250-mile range, while Tesla broke the 400-figure mark. Waiting too long could be a disaster.

"There are not many reasons to buy an ICE car after 2025," said Tim Bush, an analyst at UBS. Bush also believes that hybrids and plug-in hybrids will become obsolete once EV batteries come down in pricing. With enough range and similar price tags, consumers could choose to go with fully electric vehicles instead of offerings with just a little bit of electric range.

More EVs are expected to be introduced, too, and they're going to be sold in record numbers. UBS believes that EVs will account for 27 percent of the global market share by 2025. By 2030, that number will grow to 40 percent.

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