EVs to be cheaper to produce than fossil fuel cars in six years' time

Electric cars and vans will be cheaper to produce than conventional fossil fuel cars by 2027, said the latest forecasts from BloombergNEF.

Due to the increasingly tighter emission regulations and the development of green tech and energy sources to power cars, EVs could be set to dominate all new car sales by the middle of the next decade.

The falling cost of producing batteries for electric vehicles, combined with dedicated production lines at carmarkers’ plants, will make them cheaper to manufacture, on average.

At present, the average pre-tax retail price of a medium-sized electric car is €33,300, compared with €18,600 for a petrol car. In the next six years, the costs for both sets of vehicles are expected to average $19,000.

By 2030, the same electric car is forecast to cost €16,300 before tax, while the petrol car would cost €19,900.

Strengthening that trend, electric vehicle sales boomed in 2020, especially in the EU and China.

Tougher government regulations for fossil fuel cars will also encourage new buyers to make the switch. The UK government plans to ban the sale of new fossil fuel vehicles from 2030 and Brussels is considering doing the same from 2035.

According to experts, aside from a reduction in prices of electric cars and the implementation of tougher emissions regulations, improvements in the charging network on roads is key to promoting the transition to EVs.