In my previous article, I posed the question "can EVs ever achieve true parity with ICE vehicles?"
I also included a plea for help. I asked that anyone who had information comparing the costs of EVs to IC vehicles please share that with me. I was very happy when Jordan Giesige, the host of the YouTube channel “The Limiting Factor,” sent me this chart, which he happened to have in his files.
The chart is certainly interesting. Sadly, however, it has no context for the percentages presented. Is this a comparison of two $100,000 vehicles or of two $50,000 vehicles or of something else? The differences could be rather dramatic. Plus, I suspect that the data represented may not be the most current.
In spite of this, let's make some assumptions and use the chart to consider some possibilities.
The savings on EV drivetrains vs IC drivetrains might be between $1,000 and $6,000, depending on the vehicle. (All figures given are in 2021 dollars.)
I need to add an important point here. Someone rightly pointed out in the previous article's comments something that I agree with. Parity between EVs and IC vehicles doesn’t require the sticker price to be exactly the same. EVs do deserve a premium. EVs typically have a lower operating cost and will have a longer life span. The EV’s lifetime amount of this premium could be substantial, but I think we could easily justify about a $4,000 premium today. So, for example, a $28,000 EV could be considered price competitive with a $24,000 IC vehicle.
With these things in mind, and if there is some validity to these numbers, then we may hope to see EVs at parity with IC vehicles as the battery pack costs fall somewhere below $75 per kWh.
Now, this will not be an absolute parity by-the-numbers because the cost and range of the EVs will not match their IC counterparts. However, it will be a parity of utility.
In marketing, we talk about a product's utility and we talk about product substitutions. We can hope that somewhere below $75 per kWh at the pack level EVs will be inexpensive enough to begin to have the desired utility to be viable substitutes for IC vehicles for most people. Part of the formula for this successful EV “utility parity” will be the ubiquitous build-out of charging infrastructures. This will happen, it’s just a matter of being patient.
We can hope to see 60 kWh (usable) EVs competing with economy-level IC vehicles in the not-too-distant future. I want to point out once again that I consider a 60 kWh EV an economy-level vehicle. The range is plenty to handle most driving needs. It is enough to satisfy a sizable portion of the population.
However, I do believe that many more people will prefer 90 kWh (usable) EVs. I see these longer-range EVs as viable competitors to midrange (priced) IC vehicles. Given the drivetrain savings and granting an attributable premium, we can hope to see these EVs also successfully competing in the mass market in the future.
I acknowledge that these numbers are only estimates and are somewhat arbitrary. I strongly wish that someone out there could provide actual numbers. Hopefully, down the road, we'll be able to get more data and context to move beyond conversation and speculation, but we'll take what we can get for the time being.
The same, this exercise has caused me to reevaluate my position and see EVs in a new light. It has given me a great deal of hope for the EV future. It has been predicted that later this decade, EV battery pack costs could fall below $40 per kWh. If that happens, then we could see EVs’ utility value far exceed that of their old IC counterparts.
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My thanks go to Jordan and to all those who commented on my last article. Any astute creator will admit that they learn from many sources, including their audience.
What do you think? What range and price point do you see as parity with IC vehicles?