EV mass production will certainly kill ICE cars very soon.
The Department of Energy's Vehicle Technologies Office estimates that the price of EV batteries has dropped considerably over the last 13 years. Inside EVs crunched the numbers of several studies and published papers, and the figures are shocking.
According to the DOE, the price of an EV lithium-ion battery pack has declined by 87% between 2008 and 2021. In 2008, the estimated cost was $1,237/kWh. Simply put, the 42 kWh battery in the BMW i3 would have cost $51,954, which is more than the entire car costs in 2021. The current figure is $143/kWh, which works out at $6,006.
Inside EVs points out that these figures are not precise, as it's nearly impossible to work out a real-world cost figure taking the entire industry into account. Instead, it's a perfect illustration of mass production's power.
It also points to the parallel process of improvement. Batteries aren't just getting cheaper but more advanced as well. Lucid recently became the first EV manufacturer to receive a 500+ mile estimated range rating by the EPA. The Air is also capable of doing the quarter-mile in 9.3 seconds.
This is perfectly illustrated by the difference in range between the first and second-generation Nissan Leaf. The first-generation Leaf had an EPA-estimated range of just 73 miles, while the most efficient current Leaf can do 226 miles. In 2011, a Leaf sold for $33,720. The current Leaf range starts at $27,400 and goes up to $37,400.
To make it more interesting, we decided to compare it to the price of the 2011 Volkswagen Golf. The standard gas variant cost $17,995, which makes complete sense. Internal combustion has been around for more than 100 years, and it went through the same mass-production price drop the moment Henry Ford pushed the start button on the Model T factory line. Fast forward to 2021, and the price of a Golf is $23,195.
This doesn't mean VW is ripping us off. The Golf went through several significant updates over the last ten years, including moving over to a small capacity turbocharged engine. We also have to factor in the cost of the latest gearbox technology, improvements in the suspension setup, infotainment, and safety.
The main thing to take away from this is that the price per kWh still has to drop for EVs to compete with ICE cars. Ponder on this last bit of information. Back in 2019, the base e-Golf cost $31,895. That same year you could get a Golf GTI for $27,595.
The good news is the US market will be flooded with new EVs in the coming years. Manufacturers are ramping up EV production significantly to meet the tight electric-only deadlines set by various countries.
The Nissan Leaf made the news recently following a significant price reduction. You can now get the entry-level S for $27,400, not including the $7,500 federal tax cut. Factor that in, and you're looking at $19,900 - a bargain for any new car.