According to the 29th largest bank in the world, UBS, there are not many reasons left to buy an Internal Combustion Engine car after 2025. The key factor will be the reduction of electric car battery prices below $100 per kWh, which they expect to happen in 2022.
Currently, the cost of the battery for an electric car can equal as much as 40% of its sales price but UBS expects that, by the end of 2022, that price premium will be below $2,000 and disappear completely by 2024.
That assessment is based on its analysis of the seven largest battery manufacturers in the world.
UBS says carmakers that try to hang on to sales of gasoline and diesel powered cars risk being left behind by rivals such as Tesla and Volkswagen — the world’s largest carmaker by volume — which is investing €33 billion to expand its EV manufacturing capability.
UBS adds that falling prices for batteries will alter the business case for plug-in hybrids, rendering them obsolete. The bank predicts EVs will represent 17% of new car sales by 2025 and 40% by 2030.
Battery electric cars still command significant premiums over conventional counterparts, a key factor limiting electric car take-up. This will have to be addressed by governments through policy initiatives.
Reference- The Guardian, UBS Bank Report, InsideEVs, Clean Technica, BloombergNEF