From Bloomberg News - Electric vehicles are generally more expensive than gas vehicles today, mainly because the batteries they use are expensive. This is why a lot of governments offer subsidies to help make EVs more affordable. Once battery prices come down, EVs should cost the same, or less, than gas vehicles.
If 2021 were to follow the trend, average pack prices this year should be $125/kWh. But over the past 12 months, the price of the key metals used in lithium-ion batteries have risen relentlessly, putting pressure on battery prices.
Today, the cathode material of a lithium-ion cell accounts for around 50% of the manufactured cost. This includes the cost of going from lumps of rock that you dig out of the ground to the finely tuned composition of lithium, nickel, cobalt and manganese that make EVs possible. If you take away the processing costs, the raw materials in the cathode still account for about a third of the total cell cost. You’ve then got copper, used as a current collector for the anode, which accounts for around another 5% of the total cell cost.
An alternate scenario is that 2021 could be a blip in the history of battery prices and EVs will still be on track to hit parity with internal combustion engine vehicles within three years. Before we know it, Tesla and Volkswagen will be selling EVs with $25,000 price tags that can match the performance of current entry segment gas vehicles.