Supply and demand will play a huge factor in the consumer cost of EVs, but when will they catch up to mainstream cars?
by Robert Moore, onIt’s no secret that you have to pay for the latest and greatest technology, but over time, the latest and greatest becomes cheaper as it becomes more readily available. As the tech spreads across the global market, the cost of material and manufacturing begins to lower, and that reduction in cost ultimately passes down to consumers like you and I. This is already happening with electric vehicles to some extent with cars like the Nissan Leaf – a car that was once quite pricey – now available for less than $30,000 in some markets, which makes it the cheapest EV that you can buy today.
EVs Are Not On the Same Pricing Scale As Combustion-Powered Cars
The Nissan Leaf, for example, might be a cheap EV in the grand scheme of things, but did you know that it’s still some $10,000 more expensive than the cheapest gas-powered Nissan? This is pretty much the same story that you’ll find with all automakers, with comparable fuel-powered vehicles always coming in cheaper and certainly not by a marginal amount. With the continuous growth of electric vehicles, battery technology, and market expansion, it would be easy to assume that sometime soon, EVs will be just as “affordable” as their combustion-powered counterparts. Will it actually happen, though? According to one Mercedes executive, it’s not going to happen soon if ever.
Road & Track recently had a sit down with Mercedes-Benz’s Chief Technology Officer (CTO), Markus Schäfer, who expressed some legitimate concern about the pricing of EVs and his not-so-optimistic view on the pricing of battery-electric vehicles in the future. As of 2021, the average cost of a lithium-ion battery pack was $132 per kWh. This is the primary reason why electric cars are so much more expensive. According to Schäfer, a comparable metric for EVS would be $50 per kilowatt, at which point it could bring them down to the same average cost to build. He doesn’t really see how battery power can hit that target, if it can even get close.
His reasoning is that, despite the more widespread adoption of EV technology, the cost of battery tech still isn’t affordable. Development is going on to find better solutions – like solid-state batteries, for example – but the problem with that is that it resets the evolutionary clock as the technology gets way more expensive again. He went on to discuss how mining capacity for the raw materials that go into batteries could also end up as a bottleneck issue, and, when factored with other variables, it leads him to a skeptical conclusion about the price of EVs going lower than they are now, if at all.
He stopped short of discussing how much longer it might take for EVs to become more affordable but, at this point, it seems like anything other than a base Nissan Leaf of the equivalent isn’t going to be feasible to purchase for a single-income family. Things could change a lot between now and 2030, though, and perhaps by then, things will be different. One thing you can be for sure of is that unless EVs get cheaper in the near future, the graduation shift to a full EV market is going to be difficult for anyone that doesn’t make an average income.
