Electric cars will be cheaper to produce than thermal cars in 2027

In 2027, electric cars will be cheaper to produce on average than their thermal counterparts, thanks to innovations made over the last 10 years by startups in the sector, according to a consulting firm. But inevitably, there is a catch.

thermal electric car gasoline production cost
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In three years, electric cars will be cheaper to produce than thermal vehicles of equivalent size, thanks to improvements in industrial processes. At least, that's what the consulting firm Gartner says in a new automotive market study.

Electric automobile startups have shaken up the industry

Just like the Peugeot CEO predicting a bloodbath, Gartner believes that by 2027, 15% of recent electric vehicle (EV) startups will be acquired or bankrupt. “This doesn't mean the EV sector is collapsing“, reassures Pedro Pacheco, vice president of research at Gartner. “The market is simply entering a new phase where companies with the best products and services will prevail over others“, he explains.

The role of these young companies was to shake up the market. “They have brought innovations, such as centralized vehicle architecture or the introduction of gigacasting which helps reduce manufacturing costs and assembly time“, continues Pedro Pacheco, explicitly referring to Tesla. The consulting firm thus affirms that historic manufacturers had no other choice but to follow the trend in order to survive.

This will allow the next generation of electric cars to be cheaper to produce than thermal vehicles, which will be banned for sale in the EU in 2035 anyway. But of course, all is not rosy in the countries of Tesla and Rivian, which presented its new models yesterday.

Repairs on electric vehicles will be more expensive

Indeed, repair costs electric cars will be higher, according to Gartner. By 2027, the firm predicts that the average cost of repairs for a serious accident, involving the bodywork or battery of an EV, will increase by 30%.

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This means that damaged cars will be more likely to be scrapped. Indeed, the cost of repairs will not be worth it compared to the value of the vehicles, according to Gartner. In addition, more expensive repairs can lead to an increase in insurance prices, or even to companies refusing to cover certain models.

We are already seeing this with Tesla, against whom some customers have filed complaints because of the cost of repairs at its service centers. Reductions in purchasing costs are instantaneous and quickly forgotten, but overly expensive repairs can fuel negative opinions about electric cars in the long term.

But for now, things are looking pretty good for the sector, says Gartner. Despite a global market that stalled in January, EV deliveries are expected to reach 18.4 million copies this year and increase to 20.6 million in 2025.

  • The manufacturing cost of electric cars will be on average lower than that of thermal cars in 2027.
  • This is thanks to the innovations brought by new companies in the sector like Tesla or Rivian.
  • This is what the consulting firm Gartner says, which on the other hand predicts rising repair costs.

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