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BloombergNef: Electric cars will be cheaper than fossil fuel-powered cars by 2027

According to estimates by financial analysis platform BloombergNef, electric cars and vans will be cheaper than conventional and fossil fuel-powered vehicles by 2027. At the same time, the cost of battery production is reduced and governments’ stricter emissions regulations for climate change will enable the demand for electric vehicles to increase rapidly in the coming years. Experts currently base the pre-tax retail price of a medium-sized electric car as €33,300 (about ₺334,344), and the price of a similar gasoline-powered car as €18,600 (about ₺186,750). However, experts estimate that both will cost around €19,000 (about ₺190,800) in 2026, and that electric vehicles will become even cheaper in the coming years.

Larger vehicles such as electric sedans and SUVs will be produced as cheaply as petrol and diesel models by 2026, according to BloombergNEF’s forecasts. In 2027, these vehicles will be cheaper than their counterparts running on conventional fuels.

AN IMPORTANT STEP IN COMBATING CLIMATE CHANGE

Switching from fossil fuel-powered vehicles to electric ones is seen as an important milestone in the world’s fight against climate change.

As reported by BloombergNEF, combined with the falling cost of producing batteries for electric vehicles and specialized production lines at their growing factories in auto companies, producing electric vehicles will make them on average cheaper than conventional cars in the next six years, even before any government subsidies.

In the study, the current pre-tax retail price of a medium-sized electric car is €33,300 (about ₺334,344), and the price of a similar gasoline-powered car is €18,600 (about ₺186,750). Experts estimate that both will cost around €19,000 (about ₺190,800) in 2026.

By 2030, the same electric car is estimated to cost €16,300 (about ₺164,000) before tax, while the gasoline car will cost €19,900 (about ₺200,000).

However, the timeline for the study’s cost parity is more conservative than for other estimates. Earlier, investment bank UBS predicted that electric cars will cost the same by 2024. However, experts agree that the cost of batteries will continue to decline for years to come.

THE COST OF BATTERY PRICES WILL REDUCE THE ATTRACTIVITY OF HYBRID VEHICLES

The new study, commissioned by Transport & Environment, a Brussels-based nonprofit organization that campaigns for cleaner transport in Europe, predicts that new battery prices will drop by 58 to 58% per kilowatt-hour between 2020 and 2030.

Reducing battery costs to less than $100 per kWh is seen as an important step towards greater use of all-electric vehicles, and will largely eliminate the financial appeal of hybrid electric vehicles combining a battery with a conventional engine.

Electric vehicle sales, on the other hand, boomed in 2020, especially in the EU and China, but environmental campaigners are urging governments to implement stricter emissions regulations to encourage more drivers to switch.

The UK government plans to ban the sale of new fossil fuel vehicles from 2030, while European companies urged the EU to set 2035 as the end date for the sale of new combustion engine vehicles on the block.

Source: NTV / Translated by Irem Yildiz

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