E-cars remain expensive for manufacturers and buyers

The production of an electric car is significantly more expensive for the car manufacturer than that of a classic combustion engine. Consumers also have higher costs than if they drive a petrol or diesel – but not always.

Europe and Germany are lagging far behind in the production of battery cells for e-cars.  The vehicles are still expensive for manufacturers and customers.

EElectric cars are likely to continue to weigh on 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 fall from 90 euros per kilowatt hour today to 68 euros in ten years. Materials that are low in cobalt, 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 still lowering margins, so investments in technological progress are the greatest lever for future cost reductions while increasing performance at the same time,” said Neuhausen.