Electric Cars ‘Will Be Cheaper To Produce Than Vehicles Powered By Fossil Fuels By 2027’
Electric cars will become cheaper to produce than conventional cars powered by fossil fuels in just six years time, a new report has suggested.
It’s predicted larger cars such as SUVs will decline in price first, becoming as cheap as diesel and petrol cars by 2026, followed closely by the price of smaller cars dropping by 2027.
It’s believed many car companies are accelerating their electric car plans in a bid to meet with global warming guidelines.
In the UK in particular, it was outlined that half of the country’s cars must be electric by 2030 in a bid to meet its climate change goals, Auto Express reported last year.
The new predictions come as part of a new report produced by BloombergNEF, cited by The Guardian, which found the falling price in producing batteries is what will make electric vehicles (EVs) cheaper to build.
New battery prices are expected to fall by 58% by 2030, compared to 2020.
Research found the average pre-tax retail price of a medium-sized electric car is currently €33,300 (£28,914), while a fossil fuel car is only €18,600. However, come 2026, both cars are expected to be priced at around €19,000 (£16,396).
Meanwhile, by 2027, BloombergNEF predicted that fossil fuel cars will become more expensive than their electric equivalents, and by 2030 petrol cars will have risen again in price, while EVs will have dropped further.
Discussing the findings, UK director at Transport and Environment Greg Archer, said:
By mid-decade electric cars and vans will be cheaper to buy than equivalent fossil fuel cars, and with tax breaks for electric cars the government can bring forward this date. Ending the sale of polluting vehicles with engines by 2030 is entirely realistic, but this won’t happen unless car and van makers are required to mass produce EVs under strengthened regulations.
‘If carmakers expand production of battery electric cars, within a few years they will be cheaper to buy, much cheaper to run, and far better for the environment,’ he added.
COVID is likely to slow down car manufacturers’ plans, but, in a separate report, BloombergNEF still appeared to be confident that there will be more electric cars on the streets in the not-so-distant future.
Despite the prices of electric cars still being quite high, 2019 saw 1.7 million of them being sold, compared to just 450,000 in 2015.
This is predicted to continue to increase with 8.5 million electric cars being sold in 2025. Sales are expected to more than double by 2030.
While it appears that sales of EVs will boom, it’s going to be an uphill battle to have them dominating the streets compared to fossil fuel vehicles. 2030 will find a staggering 1.4 billion passenger cars on the world’s roads, but only 8% of those will be electric. It’s hoped by 2040 this percentage will rise to 31.
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