Electric cars will soon cost less than thermal cars, but it won't be all rosy

Expected for years, price parity between electric and thermal cars should be achieved from 2027. And this is thanks to falling development and manufacturing costs. Specialists also predict massive disappearances of manufacturers by this time, while competition is tough.

Renault 5 E-Tech Electric // Source: DPPI

With sales up 37% in one year in France, the electric car market is generally doing well. However, many motorists are still held back by the range as well as the price. They consider these cars too expensive, despite recent reductions made by the brands.

Parity will soon be a reality

In fact, since last year, manufacturers have been engaging an impressive price war, launched by Tesla and very clearly followed and which should intensify. However, electric cars still remain more expensive than their thermal equivalents for the moment. But when will this change? According to some specialists, this is expected by the end of the decade. But market research firm Gartner gives us an even more precise date.

In a press release just published, he explains that zero-emission (exhaust) cars will be less expensive than internal combustion models. from 2027. How is this possible? Well in particular thanks to the lower production costs. From this date, electric cars will be cheaper to manufacture, thanks in particular to the fall in the price of lithium, among other things. In addition, manufacturers are adopting new manufacturing methods.

This is the case of Renault, which plans to achieve parity in thermal – electric prices between 2027 and 2028, thanks to its new electric cars, which will succeed the current Mégane and Scenic.

Citroën ë-C3 // Source: Marie Lizak for Frandroid

We are thinking in particular of Tesla and Toyota, who want to develop Gigacasting, which makes it possible to reduce the number of parts required. A much more economical solution, but which also has a big disadvantage. And for good reason, this risks making cars more difficult to repair, which will therefore increase costs in the event of an accident. Precisely, the firm estimates that the average price of these operations following a serious accident on the bodywork and the battery will increase by 30%.

And this should also have an impact on insurance contributions, which are currently more advantageous for electric cars. Moreover, if the latter are more expensive at the moment, they still remain more interesting in use, with less expensive maintenance, not to mention the cost.cost of recharging which is also more interesting.

Many bankruptcies to be expected

The cost of electric cars should also fall thanks to the choice of brands ofinstall smaller batteries, since we know that the latter represent around 40% of the price of a vehicle. A solution which allows us to wait while waiting for the development of solid accumulators, which should not arrive before the end of the decade. However, some are already starting to install semi-solid packs, like Nio.

But the American cabinet does not stop there on predictions for the future. Looking into his crystal ball he also sees many disappearances of companies and manufacturers. According to him, 15% of electric vehicle companies founded in the last decade will leave the market by 2027. He explains that they will either be acquired or go bankrupt. It must be said that competition is getting tougher and tougher today.

Xiaomi SU7 // Source: Xiaomi

This is particularly the case in China, where there are more than 80 specialized manufacturers in this engine. This particularly pushes the Aiways firm, in great difficulty, to give up selling its cars there to concentrate on exports, particularly to Europe. The company is not the only one to believe in the potential of the Old Continent, since this is also the case for MG, BYD and Xpeng, among others.

But we can also cite American firms, such as Lucid Motors and Rivian or even Fisker, which are in very delicate financial situations.

Gartner finally highlights that market penetration is expected to continue to increase this year, notably with an increase in exports. They should reach 184 million units in 2024 and 20.6 million next year. But the goal will now be to survive rather than make a lot of money.

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