Whether you are a green advocate, an automaker, or just a car lover, you’ll want to know how much it costs to make electric vehicles. This is a question that has been asked repeatedly over the past few years. The answer is that there are many factors that go into the cost of making an electric vehicle. It can vary depending on the type of vehicle you’re designing, the technology being used, the battery size, and the price of the car itself.
EVs don’t have an engine
Despite the fact that EVs can offer significant benefits over their gas cousins, many carmakers are still resigned to the reality that making electric vehicles is more expensive than producing gasoline cars. However, there are better options that could speed the industry towards profitability.
First, an OEM can save money by leveraging leading strategies for low-cost ICE design. Second, it can increase its EV sales by selling more battery-electric vehicles. Finally, it can boost its battery leasing program.
For the same reason, a new EV model can be more cost effective than a gas car within a few years. This is due to the fact that the price of energy storage is dropping due to the introduction of lithium-ion battery technology.
The biggest hurdle for the wider consumer adoption of EVs is not the cost of making them, but rather the purchase price. A typical BEV in the United States costs roughly $30,000. That is not a very good payback period.
Declining battery costs
Until recently, the battery cost of an EV was not an issue for most drivers. However, as demand for EVs increases and the supply of materials dwindles, automakers will need to keep costs in check.
The electric vehicle industry has long been waiting for a point where battery cell prices are less than $100 per kilowatt-hour. The $100 benchmark is not actually a price, but rather an estimate of when EVs will be able to match the costs of traditional gas-powered vehicles.
Analysts have come up with a few different estimates for the $100 benchmark, but the most optimistic is $55/kWh. That figure is a volume-weighted average of 200 survey data points from buyers and sellers of lithium ion batteries. It is a modest number, but it is a good indicator of where manufacturers are focusing their efforts to lower the costs of EVs.
In an attempt to get closer to that benchmark, some manufacturers are building new EV battery factories. These factories will enable them to produce more EVs, which should result in more cost declines.
Incentive programs
Whether they are used or new, electric vehicles are increasingly available at affordable prices, thanks to incentives programs across the country. These programs are helping to drive the market for EVs worldwide. However, in order to truly benefit lower-income communities, incentives must prioritize equity and community engagement.
For example, New York State Energy Research and Development Authority offers rebates for the purchase of new EVs. The program also offers special rates for off-peak charging.
California’s Clean Fuel Reward is a time-of-sale incentive program that applies to anyone who purchases or leases an electric vehicle. It’s funded by the state’s Low Carbon Fuel Standard. You can find out more about the program here.
The Salt River Project offers a $50 bill credit for customers who charge their vehicle at certain times of the day. This incentive applies to all types of EVs, including hybrids and plug-in hybrids. The incentive is available to customers who install a Level 2 charger.
EV platform vs ICE platform
EVs and ICEs have many common components, but there are some significant design differences. This can make it difficult for consumers to choose between the two. The key is to inform customers about the differences between the two and make them aware of the benefits of choosing an EV over a conventional ICE vehicle.
Compared to an ICE, an EV is significantly lighter, has fewer moving parts, uses a lower-density energy source, and produces lower emissions. EVs also have a higher efficiency and torque than an ICE. Most EVs are battery-powered, and their range is determined by the amount of power stored in the battery.
In the United States, the average buyer drives about 13,000 miles per year. The cost of owning an EV can be less than half that of a gas-powered car. This includes maintenance and fuel costs. In addition, owners of EVs can save as much as $60 a month on their maintenance and fuel expenses.