Are Electric Cars Still Expensive?
Early electric vehicles were much more expensive than internal combustion (ICE) vehicles and were often uninteresting with poor performance and limited driving range. Often, manufacturers built a token number of electric vehicles to satisfy regulatory requirements, and sold them at a loss. There has been a dramatic change since 2015, and especially in 2019 regarding the performance, quality and driving range of EVs, and a recent explosion of new models from virtually all motor manufacturers – no longer as a token regulatory response but as a main-stream option.
How has this dramatic change happened?
Firstly there has been a huge increase in the volume of Lithium Ion batteries manufactured which has driven a cost reduction of >80%.
Secondly, there has been a continual process of incremental improvements in battery cells resulting in higher energy density, better safety, improved charge acceptance (can charge faster), longer cell cycle life, and improvements to the design and manufacturing processes of complete battery packs.
Thirdly, there has been a massive rise in the number of pure electric vehicles with dedicated production lines, and a whole ecosystem of high volume parts production, and in some cases EV platforms designed from the ground up for electric vehicles rather than conversions of ICE vehicles to electric operation.
Overall, the above processes have resulted in existing EV models (Often at the premium end of the market) being updated with bigger battery packs, improved performance, and substantially better equipment, and a whole range of new models slotting in – often at a lower price point in the market whilst still giving adequate performance and range for the class of vehicle they are competing with.
Also to be considered, virtually all EV models are classified as automatic and can be driven on an automatic licence.
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Are Electric Cars Still Expensive?
That depends what you mean by the question.
Current EVs still tend to have a higher forecourt price than the nearest equivalent ICE vehicle, especially at the lower end of the market, but for premium vehicles, the price difference is now a fairly small percentage of the ticket price.
Often where a model is available as an EV or an ICE vehicle, the EV is offered in a fairly high level of trim, and priced in the same ball park as the most premium engine option e.g. priced similarly to a 2 litre diesel with fancy trim and alloy wheels rather than a 1.3 litre petrol in basic trim with steel wheels.
Electric vehicles with the exception of cars over £40,000 are still eligible for a registration grant of £3,000 for cars, £7,500 for taxis, £8,000 for vans, and up to £20,000 for heavy trucks which is usually already worked into the forecourt price.
Other Factors to Consider
However, when considering the cost of a car, ticket price is only one factor to consider. Other factors are “fuel” cost, insurance, servicing costs, road fund licence and other tax considerations all of which need to be taken into account to estimate the cost of ownership of the vehicle for an owner's particular use case.
When all these additional factors are accounted for, electric vehicles are often significantly less expensive to own than their ICE counterparts.
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