Electric cars and SUVs are likely to become cheaper than their conventionally-powered counterparts as soon as 2025, according to the results of a U.K.-based study released late May, reports Automotive News.
Bloomberg New Energy Finance spearheaded the research study, which focused on the diminishing costs of high-tech batteries while predicting the comparative pricing of EVs to gasoline- and diesel-powered vehicles of the future.
Battery packs constitute roughly half the overall cost of modern EVs, meaning cheaper batteries will significantly impact overall vehicle price.
The Bloomberg study projected battery costs will fall by roughly 77 percent between 2016 and 2030, meaning EV prices could fall precipitously in the coming decades, to the point government subsidies may no longer be needed to coax Canadians into electric cars.
“On an upfront basis, these things will start to get cheaper and people will start to adopt them more as price parity gets closer,” said Colin McKerracher, Bloomberg analyst.
The climbing costs associated with meeting ever-stricter emissions standards set forth by government regulatory bodies was also factored into the analysis of the study.
After many years of aggressive advancement, internal combustion engines are now extremely clean, and as automakers are obliged to further reduce the fractional emissions of their vehicles, research and development costs are expected to rise significantly, ultimately impacting the sticker price.
As market share eventually swings towards electric-powered vehicles, it will be increasingly difficult for automakers to recoup the R&D costs associated with the production of internal combustion engines, unless some measure of stability is brought to emissions standards for conventionally powered vehicles.
Currently, less than one percent of vehicles sold in Canada are electric, meaning governments have their work cut out for them as they aim to corral Canadians into electrically-powered cars and SUVs.