Electric Cars: Why Should I Buy an Electric Car?

Electric Cars: Why Should I Buy an Electric Car?

SPEAKER 1: I want to pick up on
one of the points that came up here called a purchase price. So while I’m quite convinced
now that electric workers are a new technology forward for
us, if I go to the shop now, I see that the purchase
price is still higher. So my question for all of
you next is, when will I see the purchase price of electric
cars become equal to or even lower than a gasoline car in the future? And how can technology policy
and business help in doing that? SPEAKER 2: It will very soon. I am expecting around 2025,
the purchase price cheaper than the classical car, combustion
engine car, and maybe even sooner. And the reason for that is the
development of the technology. In fact, the biggest part of the
price of the car is the battery price. And we saw the last five years,
a huge dive in the battery price. Just five years ago, it was 1 kilowatt
hour of battery almost $1,000. Now, we are at a level of 200. And it’s still going down
with the mass production, with the new technology developments,
and with the wide spread of electric vehicles. There is also another
driver, which is, of course, the mass production of all
parts, interchangeability, an important factor, but also,
advances in power electronics and energy conversion, which will push
the price down further to the lower prices. So I expect that this will be,
by 2025, really cheaper car than combustion engine car. SPEAKER 3: Yes, I agree here
totally with Professor Bauer. It’s all about economies by a
lack of scale, you could say. It’s a new technology. If you look at the production
numbers, they’re sometimes one offs, and in many, many cases
now, it’s small series. But the whole supply
chain has to come to life. And economies of scale will drive
down not only the batteries, but also the whole production
of the electric vehicle. However, the statement that the sticker
price is higher is even not true today. Because if you look at the Tesla
Model S, it’s mentioned before, and you compare it with a Maserati
with the same acceleration, and the same looks,
and the same quality, the Maserati is more expensive
than the Tesla Model S to buy. Also, the other thing, what will
change it for the private owner, because we should admit that in
the Netherlands, the EV private didn’t take off yet. Even in the second hand
market, it doesn’t sell. Because there were hardly no incentives. So those buyers were very pure,
looking at what do I get for the money. And now, the last years, you see
that a private lease is coming up. And you can private lease,
for instance, a Nissan LEAF already for below 400 euro. And if you look at that price, which
is, in fact, the total cost of ownership price, but then in the lease contract,
it’s cheaper than the competition. And that’s because the
energy is included. So the electricity and the
fast charging is included. So it’s already cheap. So I think 2022 is certainly
have to break even, but already when you look very closely
and think about it, it’s already there. SPEAKER 1: OK, that’s very
promising for the future. SPEAKER 4: It is very
promising, but I do not think that the average car
buyer is very concerned about whether to choose the Tesla
Model S or a Maserati. SPEAKER 3: No. SPEAKER 4: I think we are talking
about when are electric cars really the cheapest alternative, the best
alternative in the mass car market. OK, this moment is
certainly going to come. I think it’s going to come pretty soon. But I don’t have a
crystal ball, and neither do policymakers have a crystal ball. It is evident, though, that
governments around the world have been very active to make
electric mobility competitive. The sooner, the better. Before they started incentivizing
car owners with subsidies and fiscal stimuli, governments have
been investing a lot in research, and development, and
demonstration programs to speed up the introduction of
electric vehicles in the market. And now it is all about stimulating
the demand side of the market, to make it really happen. For governments, what
is a complicating factor is that there are more interests
at stake than just stimulating electric cars for air quality
reasons, or energy transition reasons, or climate policy reasons. There is also a thing such
as economic policy, which includes industrial
policy, and government also has to protect established
industrial interests. And we have to make sure that the
established industry, if countries have an extensive car
manufacturing industry, is not just evaporating
without an alternative to replace the jobs getting lost. And I think we are now
at a point where we are quite confident that
electric mobility is going to break through in the market
quite soon, in the near future. But governments and their
national industrial champions are now competing for the
future electric vehicle market, in terms of technology leadership and
in terms of manufacturing facilities. And that is mainly because of
employment opportunities involved. One of the signals here is,
for instance, Maros Sefcovic, one of the vice presidents of the
European Commission, in October 2017, last October, he
announced that Europe is going to make billions of
euros available to support the establishment of large scale battery
manufacturing facilities in Europe. And that is with the aim to
create 4 to 5 million new jobs. SPEAKER 2: Margot mentioned
a very important point, and it is automated vehicle
driving automated way. And this will also, from
technology point of view, completely change the
usage of the vehicle. You can imagine you are coming
home, getting out of the car, which is driving automatically. The car itself goes to the charging
spot somewhere nearby or maybe even further away, charging itself,
and stays again ready when you need it. So all these worries about the range
anxiety, about the charging rate and taking cables, they will
be removed by contactless charging by the automated driving. So we are heading to a
completely new landscape of the driving, which we
have to really now try to understand and
estimate the effect of it. But this will also give a
huge stimulus to the people to purchase an electric vehicle. And this is something which
is technology driven, in fact. SPEAKER 1: So if I conclude some of
the observations from this discussion, I can make full conclusions. The first is that the total cost
of ownership of electric vehicles is already lower than
conventional gasoline vehicles. So that’s already a win
situation for electric mobility. In terms of buying price
of electric vehicles, you see already, for
example, the luxury segment, that electric vehicles are already
cheaper than conventional vehicles. While in the mass market
segment, you still have the purchase price of
electric vehicles being higher. And this is where the
role of governments come in, where they provide
subsidies and other methodologies to encourage people in the mass market
segment to buy electric vehicles. However, electric
vehicles and the policies are not able to ensure the
adoption in the long term. Because if you remove a policy, that
the buying effect on electric vehicles is reduced.

About the Author: Michael Flood

1 Comment

  1. Electric cars are sooo much more cheap when driving than an gasoline car.
    Almost no cost for electricity, almost no maintenance. No clutch replacement, no motor oil, no spark plugs, no heat stress of the engine…
    My first 36.000 km driving 100% all in all cost me less than 200 Euro, including 119 Euro for the first maintenance after 30.000 km and including electricity.

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