Nissan expects price parity between electric and ICE by 2024
Nissan reckons there will be price parity between electric and internal combustion cars by 2024.
This comes from Nic Thomas, Nissan’s global head of electric vehicles, who cited new research conducted by Morgan Stanley at last week’s Nissan Futures seminar in Hong Kong. The research suggests that decreasing battery prices combined with ballooning costs for manufacturers to meet stringent emissions standards will put electric vehicles in the same price points as ICE-powered ones.
Since 2010, battery costs have dropped from $US210-$230 per kWh to produce, down from US$1000 per kWh. According to the research, that price is projected to fall even further to around US$100 per kWh by 2024.
The research then pinpointed 2024 as the tipping point for costs between the two powertrains.
Thomas went on to say that products Nissan is developing for the early 2020s could beat that crossover. However, that doesn’t mean the EV will automatically become as cheap as the cheapest petrol car on the market.
Battery efficiency may go up but demand for bigger batteries will also increase. Plus, since batteries use a lot of natural resources like nickel and lithium, they are prey to market fluctuations. According to Natasha Kaneva, head of metals research and strategy at J.P. Morgan: “Proportionally, the cost of raw materials will increase over time relative to the total cost of the battery pack. In fact, if total battery pack prices drop from $209/kWh to $100/kWh, but raw material costs stay the same, the raw materials cost would account for 56 per cent of the price, substantially higher than today’s 27 per cent.”
Europe will see a rise in new plug-in electric vehicle sales from two per cent to around nine per cent by 2025, or close to 1.5 million vehicles. “Meanwhile in the U.S., tougher fuel economy regulation will likely push automakers to expand their EV offerings, but not with the same degree of urgency as in Europe, where there are looming carbon dioxide emissions targets and fines. Nevertheless, overall EV sales – including BEV, PHEV and hybrids – are estimated to account for over 38 per cent of total sales in 2025.”