Electric cars must become cheaper. Incentives aren’t enough

Some electric vehicles still cost €10,000 more than petrol versions of the same cars

While we currently fret over charging times, the reliability of the public charging network, and the ever-hovering spectre of range anxiety, there is another great challenge facing electric vehicles (EVs). As we move steadily towards the new Government’s solidified 2030 deadline for an all-electric market for new car sales, EVs are going to have to become much cheaper if we’re to be able to afford them.

That has been happening – the likes of the new Opel Corsa-e, the Renault Zoe 50, and the Peugeot e-208, are all priced in the €26,000-€27,000 region, comparable in list price terms to the likes of a well-specced VW Golf or Ford Focus. There's a significant catch, though. These well-priced electric cars are based on a class of car smaller than a Focus or a Golf. Indeed, a Corsa-e or e-208, even with the current State-backed incentives for buying an electric car, are still some €10,000 more expensive than the basic petrol versions of the same cars.

That is still a significant barrier to electric car ownership. While the lower running costs of electric cars do help to balance that figure out somewhat, there is still resistance at the consumer level to the sight of those lofty electric car price tags. One commenter on The Irish Times website recently told us that: "Every single one of these cars is priced in the car bracket above it. The Peugeot e-208 is in the 308 category, the Kia Niro is in the Sportage price range, and so on. Smaller cars for more cash? Good luck with that. I'll stick with my value for money diesel, thanks."

Mass adoption

Such feelings are not in the minority, so there’s a job of work to do if electric cars are going to be affordable for mass adoption. While prices certainly have come down, at the same time as ranges and battery densities have been going up, EVs remain stubbornly expensive and look set to be so for some time.


It has been assumed, thus far, that as EVs become more popular, economies of scale will bring their prices down, and the need for large government-backed incentives will be lessened. Not so, says MIT. “Our cost analysis indicates that a mid-sized battery electric vehicle with a range of 200-plus miles will likely remain upwards of $5,000 more expensive to manufacture than a similar internal combustion vehicle through 2030,” said the MIT report. “This suggests that market forces alone will not support substantial uptake of electric vehicles through 2030 because cost differences with incumbent internal combustion engine vehicles will persist.”

The report warns that while predictions that the costs of producing the batteries will come down are generally correct, the worrying fact is that many of the analyses that say batteries will become cheaper fail to take into account the cost of the raw materials used – principally lithium, cobalt, manganese, and nickel. A recent BMW seminar on battery design and production revealed that of the cost of creating a new EV, the battery accounts for about 80 per cent of the total vehicle cost, and of that, 80 per cent is down to the sheer cost of the raw materials.

BMW says it has secured supply of battery materials such as cobalt and lithium up to 2025, but after that it’s anyone’s guess if there’s sufficient metal in the ground to meet demand. One hope is recycling – 95 per cent of current batteries can be recycled – but there are question marks over the quality and longevity of the recycled products which still need to be answered.

BMW's battery design expert, Dr Peter Lamp, concurs on the unpredictable cost of batteries, telling The Irish Times that: "We definitely see a clear path through to achieving our goals, and we will have a 600km-capable EV on sale by 2025. Beyond that, the big challenge is bringing down the cost while driving up the energy density. Until now, as you bring up the energy density, the cost naturally comes down, but once we reach 2025, that will start to change, the relationship will be no longer linear."


With the battery pack likely to continue making up such a huge chunk of the value of an EV, savings will have to come from other areas. It may seem that savings might be hard to make in the electric motor – surely we by now have brought such a simple device to a peak of efficiency – but according to the chief executive of a major supplier of such components, the motor and the way it’s used can yet yield significant savings.

"The saving's aren't really there to be made in the obvious areas of the motor itself," Moran Price told The Irish Times. Price is the chief executive and co-founder of electric motor and EV powertrain supplier IRP Systems, and she says that the unexplored area for savings is in what you do with the motor once it's been built.

“It’s more in the areas of the system integration, together with the control software, together with the power electronics – those are the areas where there is still a lot of room for innovation. We try to look at it very holistically, not to separate the different disciplines. We have seen that, in some of the larger manufacturer R&D centres that there’s a strict separation between software and hardware, between electronics and mechanics. We try to look at everything together. It’s a multidisciplinary problem. It involves all aspects of engineering we we we cannot really separate those elements from one another.”

The danger, says Price, is that the major car companies right now find it difficult to "think" in that agile, multi-disciplinary way, which is why smaller startups such as Tesla and Nikola Motor have stolen an apparent march over them in battery and EV technology. "Definitely I think everyone that has no legacy of decades of tradition can move faster and can also make some very quick decisions as the market evolves and develops" Price told The Irish Times.

“I think we will see more and more consolidation in the car world, as the big players join forces to try and bear that R&D cost, but not everyone will survive. Survival will be tied to the integration of smart mobility technology, and electric technology, because it makes no sense to go backwards. We need to go forwards.”