Will the electric car soon be as cheap as the petrol car?

Electric cars and plug-in hybrids are becoming more and more common on the streets. The price tag for purchasing such a car is still higher than for fossil-fueled alternatives, even on the used market. But development is moving forward quickly around car batteries!

Some believe that the price difference between electrified and fossil fueled cars will soon be erased. We asked Karl Wahlin, analyst at our sister company Bilpriser, how he sees the issue.

Falling prices for batteries

In December, the consulting firm BloombergNEF published its annual price comparison of batteries. It showed that the price fell by almost 13 percent in 2020 and that the average price for batteries in electric passenger cars landed at $126 per kilowatt hour. The corresponding price in 2010 was over 1,100 dollars per kilowatt hour - the price level has thus fallen 89 percent in ten years.

New electric cars price up - used ones down

The price picture of new electric cars has also dropped significantly in recent years and, above all, there have been more private leasing options with a different price level. On the used market, however, we see a different trend – prices have gone up.

-The price picture for used electric cars has been stable and rising in recent years. This despite the fact that technology development both regarding capacity and range for the batteries has progressed rapidly. But whoever thinks that there is no interest in an electric car of a slightly older model on the used market is wrong, these cars are sold quickly and often expensively, says Karl Wahlin, analyst at Bilpriser .

Still high demand on the secondary market

Some experts believe that the time when battery costs have reached the level that means that electric cars become cost-effective to produce in more product segments, and thus can also compete with fossil-powered cars in terms of price, is approaching. Some point to the year 2023, others between 2025-2030. Will it then affect the used prices of electric cars?

- In the medium term, we do not believe that the new prices of electric cars will change significantly. The development with falling battery cell prices has so far not affected to any great extent. Having said that, we still believe in a stable price level for used electric cars, there is a high demand on the used market, says Karl Wahlin.

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