EVs vs ICE, and the cost of batteries

Updated: Dec 19, 2024

You might have seen recent guff in the press about EVs, EV depreciation, the purchase price of EVs being higher than ICE vehicles, the lack of affordable EVs, etc.

This is all noise and confusion that doesn't make the slightest bit of difference to a few fundamental points;

EV costs are coming down and will continue to trend down see battery cost forecasts below...this will bring down the cost of all EVs
manufacturers are launching more and more affordable EVs Kia's EV3 , the Renault 5 , the Inster , the Dacia , the Citroen , the Alfa Romeo , and on and on...and on
EV depreciation is already bouncing as people realize things like "Hey, that's a great price for a heck of a lot of car".
"My neighbor's EV is awesome and they love it"
Operating costs of EVs are much much much lower than ICE vehicles Lower fuel costs
Lower maintenance costs
The residual value of petrol cars is going to fall off a cliff in a few years. A tipping point will soon arrive when an ICE car will be as attractive as one driven with coal and steam. new EVs are going to be cheaper than ICE cars soon, which will drive down residuals on older ICE cars
second hand EVs are going to be seen as reliable second hand buys, which will drive down residuals on older ICE cars
EVs are nicer cars, which will drive down residuals on older ICE cars
used ICE cars have a higher potential to be lemons (EV batteries can be checked pretty easily and there's almost nothing else to go seriously wrong), which will drive down residuals on older ICE cars Ask taxi drivers this question..."Have you had any problems with it?"
I've been asking that question in every taxi for years.
In EVs the answer has always been "No. It's been great", with maybe a comment on "I went through the first set of tires quickly but now I take it easy".
That is far from always the answer with petrol or diesel taxis.

But, the main thing is that the cost of batteries is still falling. It's been falling and that is continuing.

The recent Goldman Sachs review of historical and forecast battery costs tells a straightforward tale.....EVs are going to be cheaper than ICE cars on an unsubsidized basis pretty soon and they'll get cheaper.

Ref: Goldman Sachs (link above)

That's a heck of a drop from 2023 to 2026. That's what'll be in the market in 18 months.

And remember, a lot of EV manufacturers could make profitable cars at the battery prices from 2021 and 2022. And before. ( yes, we're aware that some manufacturers can't....that's irrelevant )

But - you might ask - shouldn't you wait another couple of years before you buy a new EV?

No.....no more than you should wait another couple of years before you buy a new phone. Or than you ever waited before you bought a new car.

Next year's car was always better than this year's car. Besides, if you need a new vehicle, the choice is really whether you get an EV or get an ICE vehicle. And that's already a no-brainer unless you live in a remote location AND have no access to a plug. So, if you need a new vehicle, get an EV.

Source: https://www.goeve.com/post/evs-vs-ice-and-the-cost-of-batteries