Global EV transition accelerates as falling battery costs hasten purchase price-parity in further blow to combustion vehicles

Research shows car markets in Europe, China and the US could see battery-powered electric vehicles (EVs) sport lower price tags than traditional petrol cars by 2024-26

Adoption of electric cars worldwide is seen hitting a peak of 86 per cent by 2030, new research showed, more than double the 40 per cent penetration rate projected in April

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Geely Automobile Holdings Ltd.’s Zeekr electric vehicles bound for shipment to Europe at the Port of Taicang in Taicang, Jiangsu Province, China. Photo: Bloomberg

Published: 9:19am, 14 Sep 2023

The ongoing transition to electric vehicles (EVs) will gather pace globally as battery costs – which make up as much as 40 per cent of the production cost of a typical EV – decline faster, dealing a further blow to sales of conventional petrol cars.

An expanded EV battery industry in an improving technological environment, will eventually enable leading markets such as China and the US to cross a purchase price-parity ‘tipping point’ soon when battery-powered EVs sport lower price tags than traditional petrol cars, industry experts say.

Research from Exeter University’s Economics of Energy Innovation and System Transition (EEIST) project said, the ‘tipping point’ is expected as early as 2024 in Europe, 2025 in China, 2026 in the US and 2027 in India for medium-sized cars, and even sooner for smaller vehicles – in China.

It added that small EVs are already cheaper than fossil-fuelled equivalents.

“When both the costs of operation and purchase are accounted for, EVs are already cheaper to own than petrol or diesel cars in the European Union and China,” EEIST said in a report. “The US will achieve the same within the next one or two years.”

Demand is growing due to other factors too.