Electric Vehicles (EVs) are approaching cost equality with gasoline and diesel automobiles, as indicated by the daily chart.

In a significant development for the automotive industry, electric vehicles (EVs) are expected to reach price parity with internal combustion engine (ICE) cars globally for most passenger vehicle classes by around 2030. This timeline reflects advances in battery cost reductions, expanding EV model availability, and government policies supporting EV adoption.

At the Australian Clean Energy Summit on Tuesday, Kobad Bhavnagri, the global head of strategy at BloombergNEF, made this announcement. Bhavnagri highlighted that the cost of batteries has resumed its downward trend after a brief increase due to global energy price hikes caused by Russia's invasion of Ukraine. As of 2023, battery cell and pack prices stand at $US112/kWh, down from $US166/kWh in 2022 and $US806/kWh in 2013. Battery prices are expected to fall by 20% over 2024 and continue to decrease in 2025.

The rate of decrease in battery prices is similar to the rate at which solar PV module prices have fallen, which is crucial in driving the tipping point in EV economics towards sticker price parity with ICE vehicles in most major markets for most classes of passenger vehicles. This trend is already visible in some regions. For instance, electric SUVs in Europe have already reached price parity with ICE vehicles, and price parity for small and medium EVs in Europe, large SUVs in the US, small and medium EVs in China, and small EVs in Japan is expected within the next year.

The decrease in battery prices is also important for enabling storage in the power system. Giles Parkinson, a renowned journalist with nearly 40 years of experience, including being a business and deputy editor of the Australian Financial Review, and the founder and editor of The Driven, Renew Economy, and One Step Off The Grid, underscores this point. Parkinson, who owns a Tesla Model 3, has been at the forefront of reporting on the renewable energy transition.

The trend for electric vehicle sales is towards greater and greater shares. According to the data from BloombergNEF, electric vehicle sales will continue to increase this year. It is expected that one in four vehicles sold around the world will have a plug. This shift towards EVs is not just a fad; the total cost of ownership for electric vehicles (EVs) is currently competitive with ICE cars.

The International Energy Agency (IEA) projects that although EVs currently tend to be 10-20% more expensive than comparable ICE vehicles in Europe, price parity should be reached by 2030 for most models as more affordable EVs (including those under €25,000) enter the market after 2025. In China, many EVs are already cheaper than petrol cars, indicating regional variations in the parity timeline.

Global EV market forecasts also anticipate significant growth by 2030—depending on policy scenarios, EVs could account for 50-60% of new car sales worldwide by 2030, driven by price competitiveness among other factors. This shift towards EVs is not just a fad; it is a sign of a broader transition towards a sustainable and renewable energy future.

[1] International Energy Agency (IEA), (2022). Electric Vehicles: Global EV Outlook 2022. Retrieved from www.iea.org/reports/global-ev-outlook-2022

[2] BloombergNEF (2022). Electric Vehicle Outlook 2022. Retrieved from about.bnef.com/research/electric-vehicles/outlook/

[3] International Renewable Energy Agency (IRENA), (2021). Electric Vehicles: Landscape of Battery Manufacturing. Retrieved from www.irena.org/publications/2021/Nov/Electric-Vehicles-Landscape-of-Battery-Manufacturing

The decreasing costs of battery technology, as highlighted by BloombergNEF in their Electric Vehicle Outlook 2022 report, are playing a crucial role in driving the price parity between electric vehicles (EVs) and internal combustion engine (ICE) cars, benefiting both the environmental-science and finance sectors.
As the International Renewable Energy Agency (IRENA) points out in their 2021 report on Electric Vehicles: Landscape of Battery Manufacturing, the trend of declining battery costs is not only essential for the advancement of electric vehicles in the automotive industry, but also for the integration of renewable energy sources and the broader transition towards a sustainable and renewable energy future, where technology and industry converge for a common goal.

Electric Vehicles (EVs) are approaching cost equality with gasoline and diesel automobiles, as indicated by the daily chart.