Electric cars and vans will be cheaper to make than fossil fuel models in Europe by 2027, finds research company BloombergNEF in a new study.
The rapidly narrowing gap in the upfront cost of plug-in electric and fossil fuel vehicles is made possible by cheaper batteries, new vehicle designs and manufacturers adopting dedicated production lines for EVs. BloombergNEF expects lithium-ion battery prices to decline by 58% from 2020 levels by the end of the decade.
The new study, which was commissioned by the Brussels-based campaign group Transport & Environment (T&E), finds electric sedans and SUVs will be as cheap to make as fossil fuel models by 2026. Compact EVs will hit the same milestone in 2027. Light electric vans and heavy electric vans will be as cheap to produce as diesel models by 2025 and 2026, respectively.
With stronger vehicle CO2 standards and expanded charging infrastructure, EVs could account for 100% of new vehicles sales in Europe by 2035, finds the study. T&E urges policymakers to adopt such a target when the European Commission proposes updated vehicle CO2 targets next month.