You are currently viewing We’ve been waiting for years for electric and gasoline cars to catch up.  Forecasts are increasingly pessimistic

Barely three years, that is the time that Volvo assures that we will need for electric vehicles to match the prices of gasoline and diesel. Good news that hides another that is not so good: that they are equal in price does not mean that they are cheaper.

Smaller. The secret of a drop in the prices of electric cars. The batteries will be smaller and will have more autonomy. This is stated by Jim Rowan, CEO of Volvo, who assures that in just three years we will see electric cars at the same price as gasoline.

According to the manager’s accounts, in 2025 the prices of both cars should be equal, since the costs of manufacturing the batteries will be lower. But it does not suggest that lithium prices can go down, the key point will be that with less kWh more kilometers can be offered to drivers.

$100 per kWh. This has been for years the barrier that analysts have pointed to for the prices of gasoline and electric cars to reach parity. Various studies have indicated in recent years that above the barrier of 100 dollars per kWh of cost for manufacturers, the paths of combustion and electricity will not be able to cross.

Analysts pointed out that these 100 dollars per kWh should have been reached this year, 2022. It was also warned that it was possible that this cost price would not be reached until 2024. For now, the only thing certain is that we are very far from this figure, with averages of $120 per kWh.

Prices’ check. The figure at which gasoline and electricity will reach parity has been questioned of late. General Motors has just partnered with Vale, a Brazilian mining company, to guarantee the production of batteries for its electric cars. The Automobile group has also offered its figures. The battery cost per kWh is currently $140 and by 2026 they hope to reach $70 per kWh.

It is not as good news as it seems. In the first place, because the border of 100 dollars per kWh to build electric cars at the price of gasoline is already beginning to fade. The market needs the costs of this key piece to be lower and, furthermore, it seems that only those companies that associate with mining companies will be able to access these prices.

mining for themselves. The rise in the price of lithium has been scandalous in the last two years. It has risen to over 700% and has questioned the viability of best-selling successes such as the Ford Mustang Mach E, whose price in Spain has risen by more than 16,000 euros. The future points to scarcity and a very tough funnel with a lack of mines to supply the entire supply of electric cars that is expected for the coming years.

The manufacturers’ solution is to opt for panic purchases and accept collaborations with mining companies. Stellantis has already taken positions with an investment of 50 million euros, but it is not the only one. BMW works in Argentina, General Motors in California and Volkswagen also reached an agreement in 2021 with Vulcan Energy.

The most expensive first. The parity between electric cars and gasoline has been in the second half of the 2020s for a long time. In 2019 Bloomberg predicted that it would be in 2022 when we would see that both curves would cross, but the headline had fine print: they would be the largest cars . In the same article it was specified that it was not until 2030 when reductions in the production costs of these cars of between 30 and 25% were expected.

And this is exactly what is happening. With equal power, it is possible to buy a Mercedes EQS and an S-Class for the same price: more than 120,000 euros. Below these ultra-luxury models, the prices between gasoline and electric are further apart, not only in total cost for the buyer, but also in percentage terms. The usual thing in lower models is that the price differences exceed 10,000 euros and even exceed 15,000 euros in the most expensive models.

equating up. What the CEO of Volvo has not said in his statements is whether the parity of the electric car and gasoline will be reached because the former will drop in price or because the latter will rise. The fact that both curves intersect in 2025 suggests that this will be expected in premium firms, since Bloomberg has also indicated that, in general, this is not expected until the end of the decade. Mercedes also put a figure for electricity-gasoline parity: 50 dollars per kWh and there are reports that point to an increase in prices for the next few years as a result of the shortage of minerals.

Not only is it that it seems difficult for electric cars to drop soon. Combustion vehicles do not stop rising. In 2015, a gasoline car cost an average of just over 35,000 euros, in June of this year the price rose to 44,000 euros. Added to this context are the measures of the European Union, whose greater demands in terms of safety and emissions point to an even higher price.

And as if that were not enough, manufacturers do not stop issuing notices: buying a car will become more and more expensive. At the same time that they launch another message: it is difficult to have electric cars of 20,000 euros.


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Tarun Kumar

Tarun Kumar has worked in the News sector for 05 years and is currently the Owner and Editor of Then24. He reside in Delhi, India with his Family.

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