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Will electric cars come down in price?

This is the question most people eyeing to buy a new car ask and thankfully the answer is YES.

Electric cars have grabbed the interests of consumers since they’ve been commercialised but it’s their high price which has kept plenty of users away from even the thought of buying them after all not everyone has the resources to spend approximately £60,000 on the car.

However, things are changing for better and several experts and reports have predicted that electric cars will witness a fall in prices in the near future.

Bloomberg New Energy Finance (BNEF) released a report according to which by 2025, electric cars will cost the same as petrol and diesel vehicles and they may be even cheaper than fossil-fuelled cars.

Key reason behind electric cars being highly expensive is their pricey battery which makes up 37% of the total cost of the EVs and PHEVs. However, the prices of batteries are gradually coming down as they made up 49% of the EVs total cost in 2016, and with this ratio, one can hope that the trend is going in the right direction. BNEF report also perceives that the battery prices will soon fall down to 25% of the EVs’ cost by 2024 and on average electric cars will become competitive.

Moreover, the futuristic technology used in the manufacturing of the batteries for electric and hybrid cars is also one significant factor behind the high price of these cars, however, the competition is rising and more and more car manufacturers are realizing the potential and future of electric cars. This not only will bring prices down to a manageable point but will also bring a swift improvement in the technology.

According to a paper published in Nature Climate Change, the price of Lithium-ion batteries is swiftly falling and they were a key component of EVs, it can be assumed that this price-fall will significantly impact the overall price of the electric car. As the batteries will be widely available in more affordable prices, this will drive the overall price of the cars down, after all, manufacturers always want to sell maximum units as long as they are making a profit out of them.

Other factors will also contribute such as mass-production of the electric cars and ban on oil-guzzling cars. China is vigorously pushing the EV adoption and racing to become a leader in EV manufacturing while planning to propose a ban on gasoline cars in the near future. France, Norway, and the United Kingdom aren’t much away from this, as they have announced to ban petrol and diesel cars by 2050 and replace them with eco-friendly electric cars.

However, cheap prices won’t be universal, as several premium cars will still be expensive, just like petrol, diesel or gas cars but the price of average EV or PHEV will definitely go down. Other factors will also count in the final price of owning an EV, like installing a charging station at home or buying the EV charging cable.

So, if you love to have an eco-friendly vehicle that too within your modest financial plan, then you just have to wait a couple of years and your dream car will be in your budget.

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