Falling Battery Prices to Make EVs Cheaper Than ICE Cars in 3 Years

[S'toon]

Batteries have been getting smaller and cheaper so much faster than expected that the experts at Bloomberg NEF (BNEF) have had to revise their own projections for electric vehicles every year.

BNEF projected in 2017 that “the crossover point when electric vehicles will be cheaper upfront than a combustion vehicle” would be 2026 (nine years), BNEF energy analyst Nathaniel Bullard tweeted last week.

But things have changed quickly since then and the timeframe has narrowed significantly: in 2018, it was 2024 (six years), and now, in 2019, BNEF projects the crossover point will be 2022 — just three years away.

Achieving parity for upfront, initial cost means that the buying decision for electric vehicles (EVs) is about to become a no-brainer. And that means decarbonizing much of the transportation sector is also becoming a no-brainer.

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Full article at:
https://thinkprogress.org/electric-vehicles-cheaper-gasoline-cars-e4c86bd2aebe/

 

[srs5694]

This may be true, but I can't help but wonder about battery production capacity. Even Tesla says its vehicle production is currently battery-constrained, and other manufacturers are having even bigger problems. (The Kia and Hyundai EVs are sold only in CARB states in the US for this reason, for instance.) If batteries are cheap to make but supply is limited, that will tend to drive up prices, and therefore profits, which will encourage greater investment in battery capacity, but that chain of events will create some additional time lag in market prices coming down to the point where BEVs are cheaper than ICE vehicles.

Then too, perhaps Bloomberg has already considered this in their analysis. If so, then that would suggest that batteries might already be cheap enough to make that BEVs could compete on price with ICE vehicles, if it weren't for extra markup in battery prices.

A related point is that when BEVs become as cheap as or cheaper than equivalent ICE vehicles, I'd expect demand for BEVs to skyrocket, which will in turn cause new battery supply problems. The market will eventually adjust, but that will take time, and I don't know how it will work out in the interim.

 

[wycolo]

Big players are in a position to set 'market' prices for their product at whatever level they decide is best to encourage sales to absorb whatever they can produce. So no incrementally advancing classic market here.

CARB states are where you start your effort if you expect any kind of results. Sure, I found my used SparkEV in Michigan but that was some off-scale enthusiast travelling across the country to buy one. My 2nd SparkEV, totalled in Florida but originally from a dealer in California, again weird but an exception that proves the rule.
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[Phrixotrichus]

Considering that the demand for battery cells is already significantly higher than the production and the resource prices are on a steady way up I don`t see this becoming a reality in the foreseeable future if manufacturers want something that resembles a reasonable profit margin...

I wouldn´t be surprised to actually see prices go the other way once the classic manufacturers start the ramp up for their planned vehicles.
The demand we see now is nothing compared to what has been announced/planned after all.