New research indicates that electric cars could cost the same to make as conventional cars as early as 2024.
Research from investment bank UBS suggests that the extra cost of manufacturing battery electric vehicles compared to ICE vehicles will drop to just $1,900 per car by 2022, before disappearing completely in 2024.
UBS came to this conclusion by analyzing the batteries from the seven largest battery manufacturers. This is because batteries account for between a quarter and two-fifths of the cost of an entire electric vehicle. The investment bank added that costs could drop to below $100 per kilowatt-hour by 2022.
UBS also expects the electric cars’ market share will reach 17 per cent of global sales by 2025 and 40 per cent by 2030.
“There are not many reasons left to buy an ICE car after 2025,” UBS analyst Tim Bush said. Bush added that the fall in battery costs won’t just serve as the final nail in the coffin to ICE vehicles, but would also eliminate the financial case for hybrid vehicles, The Guardian reports.
It is thought that the reduction of battery costs will trigger a fast switch to electric vehicles, which are already enjoying increased sales in the European Union and China. This has led independent car analyst Matthias Schmidt to predict that a million electric and hybrid cars will be sold in 2020 throughout the EU, out of a total of 11 million vehicles.