EVs cheaper than ICE in four to six years

Electric cars and vans will be cheaper to make than fossil-fuel vehicles in every light vehicle segment across Europe by 2027.

That’s according to a new BloombergNEF study commissioned by European-based Transport & Environment (T&E), which could see Australia and New Zealand risk losing out to European demand unless the two nations step up e-mobility policies and incentives.

The research shows battery electric vehicles (BEVs) could reach 100% of new sales across the EU by 2035, if measures like tighter vehicle CO2 targets and strong support for charging infrastructure are introduced.

T&E set 2035 to stop sales of new polluting vehicles.

Electric sedans (C and D segments) and SUVs will be as cheap to produce as petrol vehicles from 2026, while small cars (B segment) will follow in 2027, BNEF forecasts.

Declining battery costs (new battery prices to fall 58% by 2030), new vehicle architectures, and dedicated EV production lines will make them cheaper to buy.

But the early build-up of EV production and sales will be crucial to drive down costs and generate consumer buy-in for further adoption in the future, BNEF finds.

Only stricter CO2 targets for vehicle-makers in the 2020s, including a new 2027 target, can ensure that, T&E says.

“EVs will be a reality for all new buyers within six years,” T&E vehicles and e-mobility senior director Julia Poliscanova says.  

“They will be cheaper than combustion engines for everyone. Electric vehicles are not only better for the climate and Europe’s industrial leadership, but for the economy too.”

Light electric vans will be cheaper than diesel vans from 2025, and heavy electric vans from 2026, BNEF finds.

T&E says EU lawmakers will need to set van-makers challenging CO2 targets, alongside dedicated e-van sales quotas, to increase investment and the number of electric models on the market.

Battery electric cars and vans could reach 100% of new sales by 2035, even in southern and eastern Europe, but if left to the market without strong additional policies BEV cars will reach only an 85% market share and e-vans 83% in the EU by 2035, 15 years away from Europe’s decarbonising goal by 2050.

The EU Commission should set an end date for fossil-fuel car sales in June, T&E says. Some 27 major European companies called on EU lawmakers to set 2035 as the end date for selling new ICE cars and vans.

A recent poll shows 63% of Europe’s urban residents support a ban after 2030.

About seven carmakers and 10 European countries have announced plans to phase out conventional cars.