Electric Vehicle Ownership Costs Expected to Match Gasoline Cars by 2026

Electric Vehicle Ownership Costs Expected to Match Gasoline Cars by 2026
The rapid decline in electric vehicle battery prices indicates a radical shift in the automotive industry, potentially accelerating the transition towards environmentally friendly transportation on a
October 10, 2024, 11:37 pm

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A recent report by Goldman Sachs Group reveals expectations of a significant drop in electric vehicle battery prices, surpassing previous forecasts.

This decline is attributed to two main factors: technological advancements leading to increased battery energy density, and falling prices of green metals used in their manufacture.

According to the report, the global average battery price decreased from $153 per kilowatt-hour in 2022 to $149 in 2023.

This decline is expected to continue, reaching $111 by the end of this year, and about $80/kWh by early 2026, representing a nearly 50% decrease compared to 2023.

Nikhil Bhandari, co-head of APAC Natural Resources and Clean Energy Research at Goldman Sachs, stated that technological innovations have led to the release of new products with 30% higher energy density and lower cost.

He also noted that the decline in battery metal prices, which account for about 60% of battery costs, significantly contributes to price reduction.

According to the International Energy Agency report, electric vehicle batteries represent between 30% to 40% of the total cost of an electric car.

With battery prices expected to fall, Bhandari anticipates that the cost of owning electric vehicles will equal that of gasoline cars in the United States starting from 2026, without the need for government support.

These developments indicate the possibility of a major shift in the global car market, with expectations of a strong return in demand for electric vehicles in 2026, and the beginning of a consumer-driven, widespread adoption phase.

This shift is likely to lead to radical changes in the automotive industry and manufacturer strategies, as well as impacting government policies related to transportation and the environment.

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