Electric vehicles will cost the same to manufacture as traditional internal combustion vehicles by 2024, according to according to research by investment bank UBS.
The increased cost of making battery electric vehicles versus internal combustion vehicles will decrease to $1,900 by 2022 and disappear completely by 2024, according to the research, which is based on an analysis of batteries from the seven largest manufacturers.
Carmakers have been hesitant to shift production away from traditional internal combustion engine models and toward electric vehicles because of the cost of batteries, according to a report in The Guardian. Batteries are about a quarter to two-fifths of the cost of the entire vehicle, according to the report.
The decrease in battery cost is expected to lead to a faster switch to electric vehicles than previously expected, says the report. According to UBS research, electric vehicles’ market share would reach 17% by 2025. And by 2030, electric vehicles would represent 40% of global sales.