Are you eager to get your hands on a new electric vehicle, but the price is too steep? You’re in luck – electric cars will likely reach cost parity with vehicles that have internal combustion engines by next year, and electric vehicles could be cheaper that gas by as soon as 2025, according to a new report by USB.
The report makes it clear that while electric vehicles will still cost more than ICE cars, owning a new EV will be comparable to owning a gas or diesel car in the long-term. Analysts took into consideration the fuel costs, maintenance costs and other related expenditures related to owning all vehicles and used the information to determine that over time, the cost of owning a green vehicle is comparable to owning a conventional one. As Green Car Reports reports, it is becoming more affordable to own an EV due to breakthroughs in battery capacity, charge times and a growing demand for environmentally-friendly technology.
Part of the analysis required UBS to break down a $37,000 Chevrolet Bolt in order to estimate how much the vehicle cost to build. It was discovered that “the EV powertrain is $4,600 cheaper to produce than we thought and there is more cost reduction potential left.” Analysts continued that the 238-mile range Bolt costs around $28,700 to build and that GM is only expected to produce 30,000 Bolts in 2018. Therefore, there won’t be a huge incentive for it to be profitable.
On the other hand, the Tesla Model 3 is expected to be produced in numbers as high as 500,000 by 2018. When extras are added on to the base price of the Model 3 at $35,000, the company is expected to break even.
UBS declared that electric vehicles are the “most disruptive car category since the Model T Ford” and that though total sales for electric cars is still relatively small, global EV sales will reach 14% by 2025 (4.2 million vehicles). Europe is expected to take the lead in this department, selling 30% of the world’s electric cars within eight years. Now that EVs will soon cost the same to own as a car or truck with an ICE, a massive shift is expected to take place within the auto industry.
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