Electric vehicles (EVs) have been gaining popularity in recent years as more people become conscious of the environment and the impacts of fossil fuel usage. With advancements in technology, it was expected that more affordable EVs would become available to the public. However, last week, General Motors (GM) CEO, Mary Barra, remarked that she didn’t see profitable EVs in the $30,000 to $40,000 range until the end of the decade or even later.
According to Reuters:
EV battery costs are still too high to build profitable mass-market vehicles, that sell for $30,000 to $40,000, Barra said. But she predicted EV and combustion vehicle costs will equalize “sometime in the latter part of this decade … maybe a little longer.”
1. Battery Costs: One of the main reasons behind Barra’s statement is the cost of batteries. Currently, EV batteries are more expensive than internal combustion engines, which means that building an EV in the $30,000 to $40,000 range is not profitable for car companies. However, the cost of batteries has been declining, and as more car manufacturers invest in battery technology, it is expected that the cost will become more affordable.
2. Production Scale: Another factor that plays a role in the cost of EVs is production scale. EV production is still in its early stages, and companies have not yet reached the scale needed to make the manufacturing process more efficient. As production scales up, the cost of producing EVs will decrease, making them more affordable for the general public.
3. Government Incentives: Governments around the world have been offering incentives for people to purchase EVs. These incentives have played a critical role in increasing sales of EVs. However, as the market for EVs grows, governments may not offer as many incentives, which could negatively impact sales. Therefore, it is essential for car manufacturers to make EVs more affordable to increase demand.
4. Consumer Preferences: EVs are becoming more popular, but there are still many people who prefer traditional internal combustion engines. These people are unlikely to purchase an EV unless it is in the same price range as traditional cars. This means that car manufacturers have to meet the demands of consumers and make EVs affordable to everyone in order to increase their market share.
5. Innovation: Finally, innovation plays a crucial role in making EVs more affordable. As more car manufacturers invest in research and development, new technologies will be discovered that will make the manufacturing process of EVs more efficient and cheaper. This means that EVs will be more affordable and accessible to everyone.
In conclusion, Mary Barra’s statement about the profitability of EVs in the $30,000 to $40,000 range until the end of the decade may be a reality. However, this does not mean that EVs will not become more affordable in the future. As technology advances, batteries become cheaper, and production scales up, EVs will become more affordable and accessible to everyone. It is important for car manufacturers to invest in research and development, and work collaboratively with governments to make EVs a more viable option for the general public. EVs are the future, and with the right investments and innovation, they will become the norm on our roads in the coming years.