NEW YORK—Electric vehicle battery costs are falling—fast.
Last year, lithium-ion batteries accounted for nearly half (48 per cent) of an EV’s total cost. But by 2020, that figure is expected to drop to 36 per cent and by 2030, batteries will make up only 18 per cent of an electric car’s sticker price, according to a new report from Bloomberg New Energy Finance.
With falling battery costs set to give electrics a new lease on life, the U.S.-based research organization says the automotive industry is on the verge of a transformation—but warns there are still some short-term challenges.
BNEF predicts EVs will reach price parity with conventional internal combustion engine vehicles by 2025.
Though it’s a positive forecast for electric advocates, with that break-even point still eight years out, the research group’s analysts say turning a profit will be a tall order for many electric automakers over the next three years.
Those producing luxury vehicles, however, could find it easier to break even, BNEF noted. It pointed to Daimler, Audi and Volvo as three prominent examples of companies working on electric crossovers and SUVs, a segment where there’s more opportunity to charge higher prices.
You can access the report here.