Electric cars will be cheaper by 2025

According to a research conducted by Bloomberg New Energy Finance, electric cars will become cheaper by 2025, and they will account for about 35 percent of global new car sales by 2040.

The prices of electric cars are currently significantly bigger than for gas-powered vehicles, especially because the batteries needed to provide the power are costly to produce. Therefore, the sales of green models are still at modest levels, but the status quo will soon change.

The research suggests that big drops on battery prices are to come in the near future, thus making the EVs become a more economic option than gasoline or diesel cars in most countries in the next decade, even with low oil prices.

If EV’s sales are estimated to be around 462,000 units in 2015, the study forecasts that the figures will hit 41 million by 2040, representing 35 percent of new light duty vehicle sales. “Lithium-ion battery costs have already dropped by 65 percent since 2010, reaching 350 dollars per kWh last year,” Colin McKerracher, lead advanced transportation analyst at Bloomberg New Energy Finance, said. “We expect EV battery costs to be well below 120 percent per kWh by 2030, and to fall further after that as new chemistries come in.”

Researchers calculated that the total cost of ownership points for the unsubsidized battery-powered cars would become lower than internal combustion engine cars by the mid-2020s, even if the latter continue to improve their average mileage per gallon by 3.5 percent per year.

This estimation is based on the assumption that an EV with a 60kWh battery will travel 200 miles between charges. “In the next few years, the total-cost-of-ownership advantage will continue to lie with conventional cars, and we therefore do not expect EVs to exceed 5 percent of light duty vehicle sales in most markets.

Such situation according to Salim Morsy, senior analyst and author of the study, is except where subsidies make up the difference. However, that cost comparison is set to change radically in the 2020s.”