Over the next two to three years, electric cars are poised to become cheaper than their gasoline-powered counterparts, making the choice of switching to more environmentally friendly vehicles much easier.
That’s the prediction of a new report from Bloomberg New Energy Finance (BNEF), which says that the market average for batteries will hit just $101 per kWh by 2023 — the threshold electric vehicles need to surpass to become cheaper than cars running on fossil fuels.
As stated by Futurism, the main reason why the price of energy storage is such an important indicator is that the battery accounts for about a quarter of an EV’s total cost, making it the primary determinant of price.
The costs of EVs have already dropped considerably this year thanks to “increasing order sizes, growth in [battery electric vehicle] sales and the introduction of new pack designs,” according to the BNEF report. Emerging technologies and falling production costs, it predicts, might drive prices down even further.
This drop in price could represent a watershed moment for the auto industry, meaning that once EVs become cheaper than their gasoline-powered alternatives, they will appear far more attractive to consumers. That’s in addition to the fact that EVs are also less expensive to operate than traditional cars, both because they require less maintenance and because electricity is cheaper than fuel.