The crossover point when EVs are cheaper than ICE cars is getting closer, BNEF says
Energize Weekly, May 8, 2019
The “crossover point” when electric vehicles (EVs) are cheaper than their internal-combustion-engine (ICE) counterparts continues to get closer with falling battery costs, according to Bloomberg New Energy Finance (BNEF).
In a 2017 BNEF analysis, the crossover point was forecast as 2026. In 2018, the crossover point had moved two years closer to 2024.
In the most recent analysis, the crossover point for large vehicles in the European Union is 2022.
The crossover “will be a crucial moment for the EV market,” Nathaniel Bullard, a BNEF analyst, wrote in an overview. “All things being equal, upfront price parity makes a buyer’s decision to buy an EV a matter of taste, style or preference—but not, for much longer, a matter of cost.”
Powering that move to price parity and then undercutting ICE cars, trucks and buses is a sharp fall in battery prices.
That is being buttressed by projected declines in costs for chassis, powertrain and electronics, according to Nikolas Soulopoulos, another BNEF analyst.
Battery costs have generally been described as about half the cost of an EV. In 2015, for midsized cars, the battery accounted for 57 percent of total costs. Four years later, it is 33 percent, and by 2025, it is projected to drop to 20 percent the total cost of a vehicle, according to BNEF.
In Soulopoulos’ analysis, EV chassis and body costs look to drop slightly, while the costs for ICE vehicles rise modestly as lightweighting technology and innovations are applied to the chassis in an effort to meet emission standards.
Large-volume manufacturing for electric powertrains, motors, inverters and power electronics could also lower costs, Soulopoulos said. He projected costs being as much as 25 to 30 percent lower by 2030.
Falling battery costs are also enabling the application of electric technology to other types of ICE transport and machinery, Bullard said.
For example, Komatsu Ltd. is developing a small, all-electric excavator.
The company sees the excavator as a good alternative in areas where contractors are concerned about exhaust and noise, such as tunnels, and near schools, hospitals and residential areas.
Harbour Air Ltd., which operates 12 short routes in British Columbia, is adding an electric plane to its fleet, and Swedish Stena Line is working on a battery-powered ferry for its service between Sweden and Denmark.
Stena will first place a 1-megawatt-hour battery on a ferry to be used when maneuvering in port. The ultimate goal is to add a 50-megawatt-hour battery, with power for 50 nautical miles. The trip between Frederikshavn, Denmark, and Gothenburg, Sweden, is about 59 miles.