Why electric cars cannot compete against petrol engines

Electric cars will not be able to compete in the same price range as fuel-driven vehicles while they rely on lithium-ion batteries.

This is according to a report from the MIT Energy Initiative, which argues that the price of electric vehicles batteries will not be sufficiently reduced for more mainstream adoption in the coming years.

Although the price of lithium-ion batteries, which makes up about a third of the cost of an electric vehicle, is steadily declining, the reductions will soon reach a limit.

The Executive Director of the Mobility of the Future group at MIT, Randall Field, explained the problem related to the cost of materials.

“If you follow some of these other projections, you basically end up with the cost of batteries being less than the ingredients required to make it,” Field said.

Price per kWh

According to Technology Review, the current average price of a lithium-ion battery pack ranges between $175 and $300 per kilowatt-hour (kWh).

Informed projections have estimated that the price of lithium-ion batteries will be reduced to $100 per kWh by 2025. This number is punted as the ideal figure where electric car prices will be on par with fuel-based models.

To reach this level would require that the prices of the metals and materials needed for the manufacturing of lithium-ion batteries remain flat, notwithstanding the fact that the demand for these would rise as more electric vehicles enter the market.

MIT’s research therefore indicated that the price per kWh would likely only be at $124 by 2025.

This would be enough to drive the cost-of-ownership down to around the same price as that of conventional cars, but the initial purchase prices for electric cars would still be significantly higher.

Other battery technologies needed

The study further stated that from 2030 onwards, other battery technologies would need to be developed to drive prices down, as the material costs will make up an increased part of the total cost.

These include battery types such as lithium-sulfur, lithium-metal, and solid-state.

Now read: Tesla unveils its electric Cybertruck

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Why electric cars cannot compete against petrol engines