Report: Electric Vehicles Won’t See Price Parity Until 2025 Or Later


Chevrolet Bolt EV

According to a recent Bloomberg report, electric vehicles will remain at an economic disadvantage until around 2025, because battery prices are too high.

Renault ZOE

Continental’s Chief Financial Officer Wolfgang Schaefer said in a phone interview:

“High battery costs, limits to driving ranges and charging times mean that electric cars won’t have an economic advantage over combustion engines until 2025.”

It seems a bit negative, but we tend to look at it from another point of view, “traditional petrol cars will be at an economic disadvantage from 2025 going forward” – and we are A-OK with that assessment.

Anyway regardless of the context in which one takes the outlook, Continental seems to be happy with the eventual transition to EVs, as they will sell powertrain setups for some ~3,000 euros as opposed to the 750 euros for conventional combustion cars.

“In the long term, the electric-car market is very attractive for suppliers like Continental, whose customers include the world’s biggest automakers. Continental stands to benefit because it’ll eventually be selling electric powertrain parts valued at 3,000 euros as opposed to the 750 euros from conventional combustion cars, Schaefer said.”

““Our customers have a fireworks of new electric models in the pipeline that’ll hit the market in 2019 and 2020,” said Schaefer. “They and we have our hands full to get these new models ready.””

Another insight from Continental is that the $10 billion worth of EV investments currently underway from Volkswagen and Daimler over the next 5 years, will take years to payoff; which doesn’t particularly seem all that insightful – pay today to profit tomorrow.

source: Bloomberg

Category: General


22 responses to "Report: Electric Vehicles Won’t See Price Parity Until 2025 Or Later"
  1. Someone out there says:

    That is assuming no one comes up with a better, more efficient and cheaper battery I guess? I fully expect we will start seeing solid-state batteries in cars by 2020 and it will accelerate quickly. Solid-state batteries will be much more energy dense so you can use a smaller and lighter battery and still go further. Also they will charge faster and require much less cooling, all of which will radically improve future EVs.

    1. Joe says:

      When talking price parity, that’s excluding subsidies.
      With subsidies price parity might be reached earlier (2020?)

      1. EV-A says:

        The Bloomberg report mentions price parity “to buy” the car.

        Quote: “Now research from Bloomberg New Energy Finance indicates that falling battery costs will mean electric vehicles will also be cheaper to buy in the U.S. and Europe as soon as 2025.”

        If you consider TCO on equivalent specced cars, price parity has been around for a while. Subsidised for even longer.

        For extra points:
        How about including pollution-related healthcare costs, and the cost to the environment?

  2. Michael Will says:

    For sedans, electric cars like tesla model 3 are already to be much cheaper than their equivalent perfornance gas car in 2017, despite a 20+% margin. This prognosis misses the point even without the next breakthrough in battery tech.

  3. MaartenV-nl says:

    When talking about price parity they never mention the market segment.
    The most useful segmentation is the European A-segment(mini) through F-segment (large) in car sizes.
    In the F-segment Tesla is very competitive and price parity was reached a few years back.

    The new Tesla Model 3 will be in the D-segment and the competition in the Entry-level luxury car segment from BMW, Audi, MB, Lexus etc. will have a hard time to compete on price or performance.

    Around 2025 the battery prices are expected to be low enough to reach price parity for most offerings in the A-segment.

    So the question is, price parity with which cars?
    Do they know what they are talking about at Continental, or are they as clueless af Mark Fields?

  4. Seuthès says:

    Without the battery, I think that the BEV will be comparable to the ICE vehicule before 2025.
    But automakers will have to add the price of the 50-60kWh cells at the final price tag.
    Actually the price tag of the Renault Clio for the entry level in France is 13,500€ incl. VAT.
    A Renault Zoé with 55kWh of battery won’t be under 22,000€ incl. VAT. in 2025 ( in the eventually that Renault sells the battery).
    In one hand, an ICE vehicule will last for 250,000km or a little more. And in the other hand, a BEV can last for 500.000km.
    People have to see a biger picture when they buy a BEV, and not just the price tag.

    1. MaartenV-nl says:

      2025 price of 55kWh battery below €3,000 for purchase cost by automakers.

      What electric powertrain costs do you expect to keep the Zoe price that high in 2025?

      1. Seuthès says:

        I think the battery will cost more than 3,000€. Probably it will be more about 6,000€ excl.VAT.
        I prefer to be sceptical to prevent bad news.

        1. MaartenV-nl says:

          That price point will be passed before 2020 by Tesla and LG-Chem will follow in 1-2 years.

          The last decades prices have halved every 5 years.

  5. agzand says:

    People tend to forget electric cars currently are successful when they get government subsidy. For example in US market, you get about $7.5-$10k off an electric car. In order to become mainstream, they need to be competitive on their own, so at least for the foreseeable future, the battery cost reduction will be offset by reduction in subsidies.

  6. KM says:

    At first EVs suffered from vicious cycle where expensive batteries meant high price tag which meant automakers could not reach economies of scale and recoup their investment.
    If you spend billions on R&D and tooling the factory and then only sell 10000 cars a year it is going to hurt.
    But as the cost of batteries keeps falling and a manufacturer can sell 200 000 EVs a year then these other costs will fall as well making EVs even more competitive. It is not just about batteries!

  7. Scott says:

    I can buy a used 2014 Nissan Leaf for cheaper than I can get any comparable used 2014 I.C.E. vehicle.

  8. Mike says:

    Tesla gave away 15 kWh of battery in the last of the model 60s. Yes you can unlock those 15 kWh for 2500$, but not everyone will.

    It is hard to imagine battery costs currently exceed 100$ Per kWh for Tesla when you consider that they are probably trying to at least break even when maybe only 60% of S60 owners would upgrade (I.e. 0.6X167$= 100$/kWh)

  9. leafowner says:

    What a load….Price parity is here for the performance you get with an EV versus an ICE. It will only get better with time.

  10. Google me: dandanthedrivingman says:

    consider the facts Dan Dan the driving man St.Louis Missouri
    I have now driven over 2.5 million miles in the last 42 years:
    I’ve spent around $200,000 to buy gasoline and oil. I spent approximately 7 years of my life working to pay for that gas and oil. my 2017 Nissan Leaf SL 30 kilowatt battery pack in the first 10,000 miles saved me $1,500 in gasoline alone.
    if I must ask can anyone else in the USA do elementary math and see the savings it is called Roi return on investment stay tuned EZ rollers they’re here they’re stayi peace outng and now you get the car for free debate that on this forum Dan Dan the driving man has been set free God bless you all watch for me on television I’ll explain it to you stay tuned no more fooling around I’m going to kick gas cars out of the picture one to ten thousand at a time watch me.
    I’m born and raised in Missouri the heart of America the show me state number ones make it happen

  11. Longvsshort says:

    You’ll have to factor 1. Fuel cost savings, 2. Overdue commercialization of breakthrough battery research.

  12. jim stack says:

    Life cycle cost are already less than a gas car.

    Gas is really $8-10 a gallon like Europe but the USA still subsidies and allows fracking.So we are already paying that much but don’t see it, we just brrath it.

  13. Eddie says:

    With air pollution becoming terrible everywhere and ICE being maxed out/complexity , EV’s are the future. Battery storage systems(microgrids) are accelerating in the supply/demand and now storage in the complex macrogrid systems. Tesla has been courted by the military, Apple, Google not by the Tesla car but the billions of miles of data from car to car and incividual cars that are downloaded every night for future autonomous driving and more precise global mapping. This data is worth billions and no one else has it!

  14. Jake Brake says:

    Whats their $/kwh parity at pack level?

  15. Peter says:

    I save $7000 every year not buying gas or services. EVs are not expensive. I hope that the batteries in my model S last 10 years and then I will buy a new battery pack.