The State of the Electric Car Market
The up-front price of pure electric (PE) cars will be dropping below that of internal combustion engine (ICE) ones around 2025, according to a new report from IDTechEx. The fundamentals are now clear.
Short-range electric cars will continue to sell badly because of range and financial anxiety; their resale value after three years will go down 80%.
Two hundred miles/320 km is the tipping point where resale value can go only 40% down on the purchase price.
IDTechEx put it all in a report, “Electric Vehicles 2020-2030” for the full picture of 100 categories of electric vehicles (EV) by land, water and air.
In motor industry terms, the 2025 tipping point is very close, and the industry may not have fully grasped the seismic effect it will have on the sales of yesterday’s powertrains, including full hybrids HEV and plug-in PHEV.
These do not have cost reduction potential, and they will increasingly incur hassle from gasoline station numbers declining, restrictions on ICE vehicles and decline in resale price. 48V mild hybrids may be an exception because they will get pure-electric modes at a fraction of the cost of HEV.
Significantly, Continental has just announced such a 48V powertrain. In contrast, although pure electric cars cost much more today and their insurance is much higher due to the price and scarcity of trained repairers, that will be gone by 2025 with 10 times higher reliability and no inflated prices benefiting insurance, which may even go lower than is conventional.
So what is the pent-up PEV demand being released? It took only 10 years for major cities to flip from horses to cars. New cars could well be 100% pure electric by 2035, tougher emissions laws underwriting that.
IDTechEx believes that the restrictions on Li-ion battery output go way beyond factory capacity. There may be temporary shortages of the required cobalt and even lithium.
Ongoing fires cause output delays and distrust. IDTechEx finds they are more prevalent where companies push the limits of performance and where battery makers cut corners by changing all parts without thorough testing and prudent scale up in the race for higher energy density.
In 2018, Chinarecorded at least 40 fire-related incidents involving electric vehicles. NIO recently had one of its ES8 SUVs burn, the third time the model has been involved in an incident in about two months.
The Chinese government required a recall of 4,800 of them, a quarter of all sold. Tesla recently had two car fires in China. Audi is recalling its first all-electric vehicle sold in the U.S. because of the risk of battery fire.
Customers and authorities know that fires are much less frequent with EVs compared to conventional cars, but they rightly demand even fewer fires. By 2025, the availability of non-flammable LIB will be a huge step forward, but they will take time to be fully acceptable and accepted.
In view of all this, will price parity with electric cars around 2025 lead to every new car being pure electric by 2030, or will it be a non-event due to battery problems? IDTechEx calculates something in-between but, make no mistake, that will still be enough to pull down some famous names caught with stranded assets in the ICE, HEV and PHEV space.
There is scope for multi-billion-dollar businesses in pure electric cars to be created very rapidly by 2025. A rush of affordable PEVs with no charging problems will even embolden legislators to bring forward dates when polluting vehicles are banned from cities, thus saving hundreds of thousands of lives yearly. Yes, a tipping point.
Find out more at www.IDTechEx.com.
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