Electric cars remain expensive for automakers and buyers

According to a PwC study, electric cars will continue to depress carmakers’ profit margins in the future. To stop this, manufacturers should invest in research.

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Electric cars are likely to continue to burden carmakers’ profit margins for the foreseeable future. According to a study by the management consultancy PwC, the production of an electric car with a range of 300 kilometers currently costs around 4500 euros more than a classic combustion engine. A comparable plug-in hybrid with an output of 100 kilowatts would cost the car manufacturer 3,600 euros more. However, they could only partially pass on the additional costs to the car buyers.

In order to meet the requirements of the EU and avoid fines, car manufacturers would still have to increase the proportion of electrified cars to 35 to 45 percent by 2030. Buyers get a new driving experience, comfort and access to zero-emission zones in cities, said PwC strategy & industry expert Jörn Neuhausen – and for small electric cars with a range of 150 kilometers, the total costs are already lower than with a diesel or gasoline engine.

In the case of compact and mid-range cars with an electric range of 300 kilometers, PwC expects a cost advantage for consumers from 2024 even without subsidies. On the other hand, it is not in sight that high-performance battery cars with a range of over 600 kilometers will offer buyers an operating cost advantage.

PwC expects that the cost of battery cells could drop from 90 euros per kilowatt hour today to 68 euros in ten years. Materials with a low cob content, the increased use of silicon or new coating processes could all contribute to this. The additional costs for plug-in hybrids could fall to 2500 euros by 2030, for e-cars to 1500 euros and for fuel cell cars to 3000 euros.

“For automobile manufacturers, high production and raw material costs are currently lowering margins, so investments in technological progress are the greatest lever for future cost reductions while increasing performance at the same time,” said Neuhausen.

Author: Nabeel K
Email: nabeel@wheelsjoint.com

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