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In 2 years, electric cars will be equal in price to conventional cars

In 2 years, electric cars will be equal in price to conventional cars In 2 years, electric cars will be equal in price to conventional cars
24 February

In an effort to clean the air as soon as possible, many cities and regions in different countries have independently declared themselves as low and zero emission zones. To date, more than 300 cities have done this at the local level. Even in Lviv, a date has already been announced to ban the entry of vehicles with internal combustion engines into the city center.

According to the European Association of Automobile Manufacturers (ACEA), in the fourth quarter of 2020, almost one in six passenger cars registered in the European Union was an electric vehicle (16.5%). During the fourth quarter, EU electric vehicle registrations (ECVs) jumped from 130,992 units in 2019 to nearly half a million (+ 262.8%), surpassing hybrid electric vehicle sales for the first time. The growth in registrations for battery-powered electric vehicles (BEVs) and plug-in hybrids (PHEVs) grew by 216.9% and 331.0%, respectively. And it was largely driven by government incentives for low and zero emission vehicles. It is no coincidence that the greatest successes were recorded in the countries with the most generous incentives. For example, in Germany, the number of BEV registrations increased by over 500% in the last quarter of 2020.

But even with generous government incentives that make electric cars more affordable, they are still more expensive than comparable internal combustion engine (ICE) models. When will equality come?

As it turned out, calculating this scientifically is not so difficult. Bloomberg NEF in its New Energy Outlook 2020 report and the Korean management research institute KEPCO found a direct relationship between the country, the dominant car class in it and the date of price equalization. Everything is very simple: the more expensive a car with an internal combustion engine comparable in its class, the faster it will have an equivalent in price on electric traction.

Large EVs and SUVs are expected to reach ICE-like prices in the United States and Australia as early as next year. And small and midsize EVs here are projected to gain price competitiveness in 2024.

In South Korea, electric SUVs will be price competitive with ICE vehicles from 2023. Medium-sized cars - from 2024, and small cars of A and B classes - from 2026.

In Europe, a similar price parity will be established from 2022 to 2027. In China - from 2023 to 2029, the South Korean Institute predicts.

In Japan, prices for mid-range electric vehicles are expected to decline to competitive levels only after 2025. Unlike other countries, small electric cars here will become competitive in price only after 2030, due to the low cost of small cars with internal combustion engines in the country.

It is also expected that by 2030 global sales of electric vehicles will grow more than 10 times - to 25.8 million units per year. For comparison, 2.1 million electric cars were purchased in 2019.

Of course, these forecasts cannot exclude surprises that will not only shift, but bring the indicated dates closer. After all, technologies are developing more and more rapidly every year.