Electric Cars Will Be Cheaper to Afford Than Combustion Models Within 5 to 6 Years: Report

The main obstacle for drivers interested in getting on board with this new generation of cars is the fact that the price of electric vehicles is expected to drop considerably in the years to come. The tipping point should come, at the latest, in 2027. At that time, these cars are set to become, on average, less expensive than equivalent gasoline and diesel models.

According to a report by Bloomberg New Energy Finance (BNEF) for the NGO Transport and Environment (T&E), within 5 to 7 years the trends in prices should shift depending on the type of vehicle. Specifically, electric-engine light commercial vehicles such as vans should be as inexpensive to produce as combustion vehicles in this segment by 2025. The same phenomenon should be seen for sedans and SUVs in 2026 and small, city cars in 2027. An electric sedan will cost an average of nearly 40,000 euros (equivalent to about US$49,700) excluding taxes in 2020, twice as much as a gasoline or diesel model.

From 2026 onwards, these same sedans should cost less than 20,000 euros, with a further downward trend, albeit much less pronounced, in the following years. By 2030, an electric SUV and compact car should cost on average around 20,000 and 10,000 euros respectively, i.e., two to three times less than at present.

This spectacular drop in prices (on the order of more than 50% in only 6 or 7 years) can be explained above all by a continuous drop in the production costs of lithium-ion batteries, but also by the establishment of production lines specially dedicated to electric vehicles and increasingly large production volumes.

According to the study, if the transition to electric vehicles is supported politically, electrically powered vehicles could account for almost 100% of new vehicle sales in Europe by 2035. In any case, this is in line with other timeframes, as all car manufacturers have already announced that they want to exclusively produce vehicles with zero CO2 emissions by 2050 at the latest.

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