The price parity between thermal and electric cars will be a turning point when plug-in cars become popular since they will save money from the first kilometer and there will be no amortization periods. Thermic will be more expensive to refuel, maintain, finance, etc.
Today, electric cars are still more expensive to manufacture, despite their mechanical simplicity, mainly due to the cost of the batteries. They’ve been going down for years, but cell-making materials have rebounded sharply in price, and batteries are sky-high. Until the supply problem is resolved, they will not drop in price.
However, producing thermals is also becoming more expensive. Energy costs and certain supplies have increased in turn, they are more labor intensive, and making them homologous with the latest anti-pollution regulations also increases costs. For this reason, whether or not the electric ones go down at some point, the price difference will be sanded.
According to Sylvain Filippi, CEO of Envision Racing, we are four years or less away from achieving price parity, but because thermals are getting more expensive to produce. “In 2025/2026… they will begin to see parity [in prices] on the part of suppliers, at least in developed countries”.
Producing petrol or diesel cars in countries with lower standards is less expensive, and will continue to be so for some time. “That will be the turning point. When that happens and we can manufacture electric cars on a large scale, the floodgates of the dams will open.
Filippi explained to attendees at the Reuters IMPACT conference that after this inflection point, thermal sales will plummet, they will not be good investments, and they will lose value very quickly: “They will be very undesirable assets and I think the transition will be it will speed up fast. “
The forecast of the consulting firm AlixPartners indicates that global sales of electric cars will be 33% in 2028 (almost triple today) and before 2035 the sorpasso will have occurred. Therefore, in 2025-2026 a very progressive but unstoppable process of decline would begin for cars with internal combustion engines.
This rate of extinction will be conditioned by fuel and electricity prices, recharging infrastructure, tax policies, differences in treatment between electric and thermal, residual values, the culture of each country… or what certain manufacturers do. For example, Stellantis has already said that Euro 7 is going to be expensive and that it is better to move towards the electric ones with a firm step. Source | Reuters