Electric cars cheaper than gasoline? The dream takes shape

Within three years, the automobile industry will experience a real revolution. In any case, this is what we can learn from the latest report released on March 7 by the Gartner firm. Analysts therefore expect electric vehicles to be cheaper to produce than their thermal equivalents. This prospect occurring much faster than expected.

More expensive repairs?

For what ? The cost of manufacturing these green vehicles would be reduced thanks to falling battery prices, as well as reduced assembly costs. This would make it possible to reduce the selling prices of electric cars. Can we therefore imagine prices which would be lower than thermal vehicles?

This seems difficult to imagine without state aid and promotions from manufacturers. Indeed, the Gartner report also contains bad news. Analysts estimate that the arrival of new on-board technologies will make repairs more expensive.

The increase could even reach 30% for serious accidents. Therefore, some insurance companies could be reluctant to cover certain models or in any case inflate their prices.

Still on the bad news front, Gartner expects 15% of electric car companies to disappear or be acquired by 2027. We are moving from “gold rush” to “survival of the fittest ”, estimate the experts. Pedro Pacheco, vice president of research at Gartner, emphasizes:

This doesn't mean the electric car sector is collapsing. It is simply entering a new phase where companies with the best products and services will win out over others.

Battery prices are falling

Gartner's estimates partly match those of the company Benchmark Mineral Intelligence. Specialists noted last September that the average price of lithium-ion batteries is now $98.20 per kilowatt hour. We know that the latter must fall below 100 dollars for electric cars to reach the same production cost as gasoline cars.

Evan Hartley, analyst at Benchmark, explained: “Lowering cell prices could allow manufacturers to sell mainstream electric vehicles at prices comparable to those of gasoline vehicles, with the same margin, thereby improving the attractiveness of the electric transition for consumers and automakers”.

What you must remember :

  • Production costs of electric cars will drop significantly over the next three years
  • At the same time, repair prices will rise
  • We will also witness bankruptcies or takeovers of specialized companies

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