Days after one study predicted that the lifetime cost of owning an electric vehicle will reach parity with gasoline-driven versions by next year, another suggests that by 2025, EVs will also be cheaper to drive off the lot.
Even though electric cars have far fewer moving parts than conventional gasoline-fueled ones, they have hitherto cost more to build and buy. That’s partly been for reasons of limited scales of production. But mainly it’s because of the high cost of batteries—which account for roughly half an electric car’s up-front sticker price.
However Bloomberg New Energy Finance is reporting that its research suggests that plummeting battery costs will make EVs “cheaper to buy in the U.S. and Europe as soon as 2025.”
Consumers will begin react even sooner, says BNEF analyst Colin McKerracher: “On an upfront basis, these things will start to get cheaper and people will start to adopt them more as price parity gets closer. After that it gets even more compelling.”
That makes the future bleak for the vast ‘upstream’ supply infrastructure of oil wells, pipelines, refiners, tankers, and gas-stations developed to keep internal combustion automobiles running, CBC’s Don Pittis notes in a commentary predicting the “slow, painful death of the oil economy.”
For the moment, he says, “high prices and the barrier of dealing with an unfamiliar technology discourage all but the most adventurous or committed,” from switching fuels, while “companies at each step of the fossil fuel industrial complex [are] digging in their heels [and] fighting a rear guard action against change.” But that will only work so long against the inexorable drop in prices that BNEF and, earlier, the Swiss investment bank UBS predicted. Over the longer haul, Pittis comments, “companies and countries that are already planning how to adapt to that inevitable change will be the biggest long-term winners.”