EVs cheaper than ICE in about five years – report

The up-front price of pure electric cars will drop below internal combustion engine (ICE) ones around 2025, IDTechEx report Electric Vehicles 2020-2030 says.

Short range electric cars will continue to sell badly because of range and financial anxiety; their resale value after three years can be down 80%. About 320km range is the tipping point where resale value can be only 40% down on purchase price, the report adds.

“Many barriers are falling,” IDTechEx chief executive officer Raghu Das says. “Vast numbers of public chargers will no longer be essential as electric ranges increase. Indeed, the new solar cars can be operated entirely from daylight and a regular domestic plug.

“The frugal, short-distance traveller will use daylight alone. The wealthy will buy cars with up to 800-1000km range, such as the Lightyear One or the next Tesla Roadster, charging as infrequently as a regular car – no problem at all,” Das says.

“Such ranges will be commonplace by 2030. Indeed, the Lightyear One is intended to be cost-reduced to more mainstream prices where the shorter range Sono Motors Sion solar car is today with a $145 million orderbook to prove the point. Plenty of people will sacrifice acceleration to escape the misery of roadside charging, particularly in cities where most of us now live.”

In motor industry terms, the 2025 tipping point is very close, and the industry may not have fully grasped the seismic effect it will have on sales of yesterday’s powertrains, including full hybrids (HEVs) and plug-ins (PHEVs), the report says.

These do not have the cost reduction potential and they will increasingly incur hassle from gasoline station numbers declining, restrictions on ICE vehicles and decline in resale price.

The report says 48V mild hybrids may be an exception, because they will get pure-electric modes at a fraction of the cost of HEV. In contrast, although pure electric cars cost much more today and their insurance is much higher due to being a function of price and scarcity of trained repairers, that will be gone by 2025 with the 10 times higher reliability and no inflated price benefitting insurance.

New cars could well be 100% pure electric in 2035, tougher emissions laws underwriting that.

Das cautions, “As car manufacturers diverted by lesser opportunities go under and the pure-electric winners prosper there is only one cloud on the horizon – lithium-ion batteries. Although they may have dropped to only 20% of car cost by 2025, supply is an issue.”

There’s doubt li-ion battery supply will be sufficient to meet demand and there are unlikely to be other batteries or supercapacitors available within the coming decade that can meet more than a minority of the emerging needs, Das says.

IDTechEx believes other restrictions on li-ion battery output could have an impact, including battery related fires.

From 2025, availability of non-flammable li-ion batteries will be a huge step forward, but they will take time to be fully acceptable and accepted, the report says. See Lithium-ion Batteries for Electric Vehicles 2020-2030

for more.

In view of all this, will price parity with electric cars around 2025 lead to every new car being pure electric by 2030 or will it be a non-event due to battery problems?

IDTechEx calculates something in-between but expects it will still be enough to pull down some famous names caught with stranded assets in the ICE, HEV and PHEV space.

There is scope for multi-billion dollar businesses in pure electric cars to be created very rapidly from 2025, the report adds.

IDTechEx Events hosts Electric Vehicles – Everything is changing, on November 20-21, Santa Clara, USA.