Electric cars will be cheaper than conventional cars in 2022

Electric cars have become a symbol of the fight against climate change, but the path to widespread approval of them is still high price. A new study BloombergNEF shows that by 2022 they will be cheaper than cars with internal combustion engines. Ten years ago few would have predicted the rapid growth of the industry of electric vehicles. In 2010 there were about 12500, but today on the roads for five million — and their sales account for only a few percent of the total number of car sales.

This was due to the steady decline in prices and sizes of batteries, as well as healthy jolt from Tesla, which prompted other owners of automotive industry to prioritize the development of electric vehicles. But despite the progress, these cars still lag behind their “fuming” and “soft” counterparts in the price range of mileage and time “refueling”.

When cheaper cars?

The last two points remain controversial — range of most electric vehicles is measured in hundreds of kilometers, much farther than most people drive in a day,anxiety about ranges is still a concern among many consumers. But the price difference is often enough to make all but the most ardent defenders of the environment to fluctuate.

And that quickly, however, is changing. Analyst in energy BloombergNEF Nathaniel Bullard noted that in 2017, believed that electric cars will become cheaper than vehicles with internal combustion engines in 2026. In the past year shifted to 2024, and 2022 for a large transport in the European Union.

All because of falling prices for lithium-ion batteries reduce the overall cost of vehicles. A few years ago, batteries could cost up to half the cost of the car, today they account for about 33% of the total cost and should be reduced to 20% by 2025. The same dynamic is likely to lead to an increase in driving range of electric vehicles, and also adds in this trend, excavators, boats and airplanes with electric motors.

The industry looms a few problems on the horizon. While innovation has played a major role in its rapid transformation, a huge proportion of the success we have to support governments that are trying to “decarbonise” transport segment.

In the US, two leading manufacturer of electric cars — Tesla and General Motors — sold more than 200,000 vehicles, after which the Federal tax incentives that have made the beginning more accessible, began to decline. However, now it is not clear what will be further movement on the part of existing management.

The Chinese government recently reduced subsidies for electric vehicles, which played a crucial role in overtaking the U.S. as the largest market of electric vehicles in the world. This was due to fears that companies were relying too much on concessions than on innovation, and therefore, by 2020 the subsidy will be removed completely.

Weak public support could jeopardize the virtuous circle of constantly decreasing prices leading to increased demand and, consequently, the economy of scale makes the producers of cheaper batteries and cars.

But in spite of all possible obstacles, the momentum in the market seems unstoppable. Regardless of when electric cars will cross the threshold, which will be cheaper than conventional cars with internal combustion engines three, five or seven years — transport segment will be configured radically.