Rising battery prices threaten affordable electric car push

$100 per kWh is often cited as a benchmark when EVs reach price parity with conventional vehicles. Based on the latest estimates of battery learning rates from this year’s study, BNEF predicts that the average price of packs will drop below that threshold by his 2026. This is two years behind previous estimates.

However, $100 per kWh is a nominal figure that has been around for more than a decade, especially given how inflation has increased almost all costs over the past 18 months. Please be careful.

The average new car transaction price in the US this year surpassed a record high of $48,000.

EVs are raising transaction prices a bit, but the cost of manufacturing vehicles with internal combustion engines is also rising.

EV price parity is better thought of as a range than a fixed threshold. At today’s battery prices, some vehicle segments can already move to fully electric vehicles cost-effectively without subsidies.

Premium electric vehicles, for example, are already arguably priced on par with internal combustion models, as are mini city cars in China, where EV options start at just $5,000.

For commercial vehicles such as buses and delivery vans, where total cost of ownership is most important, it is already equal or very close, depending on region and usage patterns.

Battery prices will have to fall further to allow more mid-markets to be electrified in this decade. It’s definitely still achievable, but it will require much more investment in all areas of the battery supply chain, not just R&D and manufacturing process improvements.

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