BEVs Unlikely to Reach Price Parity With ICE Any Time Soon

Philip Oakley

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4th December 2019

BEVs will be $5,000 more expensive to manufacture than comparable ICE vehicles in 2030 as battery costs continue to increase the price of developing an electric vehicle.

This is almost halved compared to 2018 costs, with manufacturing a BEV today costing an average of $10,000 more than a similarly-sized ICE vehicle.

This comes from a report from the Massachusetts Institute of Technology (MIT), which said batteries will cost $124 per kWh in 2030, down almost 50% on 2018 prices. However, this is not enough to decrease the total cost of manufacturing a BEV compared to an ICE vehicle, according to the report.

It’s worth noting that MIT is heavily funded and sponsored by Detroit-based auto manufacturers, many of whom are still dependent on oil and the sales of ICE vehicles. However, these manufacturers also want to push electric vehicles in order to meet sales and emissions targets. A big reason EVs aren’t selling more is the lack of price parity, meaning governments may have to continue to subsidize customers who buy an EV well into the future.