Electric Vehicle Production Cost to Match Internal Combustion Engine Cars by 2026

In 2026, the Pre-Tax Average Price of Mid-Size Electric Cars Will Equal That of Internal Combustion Engine Cars

Photo by The Guardian, Reuters Alliance

[Asia Economy Reporter Yujin Cho] It is forecasted that the production cost of electric vehicles (EVs) will be lower than that of internal combustion engine (ICE) vehicles of similar size by 2027.

On the 9th (local time), the British newspaper The Guardian cited an analysis by market research firm BloombergNEF, reporting that large electric vehicles such as sedans and sport utility vehicles (SUVs) will have reversed production costs compared to ICE vehicles by 2026, and small electric vehicles by 2027.

According to the analysis, the current average pre-tax retail price of a mid-sized electric vehicle is 33,300 euros (approximately 45 million KRW), which is significantly higher than the 18,600 euros for gasoline vehicles. However, by 2026, it is expected that the price will equalize at 19,000 euros without government subsidies.

Furthermore, in 10 years, electric vehicles are expected to be cheaper at 16,300 euros pre-tax compared to 19,900 euros for gasoline vehicles.

This is a more conservative estimate than the earlier prediction by UBS, which forecasted that the prices of existing ICE vehicles and electric vehicles would be the same by 2024, according to the media.

Experts suggest that the price of batteries, which account for 25% of the cost of electric vehicles, will continue to decline, potentially bringing forward the point at which EV and ICE vehicle prices equalize.

According to an analysis by Transport & Environment, a Brussels-based non-profit organization, the price of batteries for electric vehicles is expected to drop by 58% between 2020 and 2030, reaching 58 dollars per kWh.

When battery prices fall below 100 dollars per kWh, it is considered a turning point for expanding EV market share and is expected to eliminate the price advantage of hybrid vehicles.

The UK government has decided to ban the sale of new ICE vehicles starting in 2030 as part of preparations to phase out ICE vehicles, while the European Union (EU) has set the ban date for 2035.

Bullia Polikanova, director of Transport & Environment, stated, "To accelerate the transition to electric vehicles, stricter carbon regulation targets are necessary," and predicted that "with appropriate regulations such as carbon regulations, all new car sales in Europe could be dominated by electric vehicles by 2035."

The media also pointed out that to speed up the transition to electric vehicles, alongside carbon regulations, reductions in battery prices, increased driving range per full charge, and improvements in charging networks are also necessary.

This content was produced with the assistance of AI translation services.