page title icon When will it be cheaper to buy an electric car rather than petrol or diesel?

The Crossover Point

In the not-very-distant future it will be cheaper to buy an electric car than an equivalent petrol or diesel. That’s without subsidies. Analysts call this the crossover point.

Every year EV battery costs decrease, while the capacity increases. In 2010 batteries cost $1000 per kwH, but only 6 years later the cost had reduced to less than a quarter of that – $230 per kwH. The cost of the battery as a proportion of an EV purchase price continues to reduce. In 2016 it was around 50% of the cost, it’s now 33% and by 2025 it will be only 20%.

In 2017 the Bloomberg forecast was that the crossover point would happen in 2026. but only a year later they will forecasting that the crossover point would now be 2024. Currently (2019) their assessment is that the crossover point for vehicles in the EU is 2022.

Given the much reduced running costs (approx 1/5 of diesel) and maintenance costs, plus the likely range improvements, the demand for EVs has to dramatically rise. Only in specific use cases will the demand for conventionally fuelled ICE vehicles persist much beyond this date.

Sources: Tony Seba – Stanford University
Bloomberg NEF
McKinsey Centre for Future Mobility

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