It looks like EVs might take a little longer to compete with ICEs’ prices, according to Mercedes C.T.O., Markus Schäfer!
There’s no denying that the electric revolution is well and truly here. Auto manufacturers and governments worldwide joined hands to accelerate the development of EVs to lower greenhouse gas emissions and stay below the 1.5°C thresholds of average global temperature.
Sure enough, the benefits of these vehicles are clear right away: ease of driving, convenience, efficiency, quietness, and emission-free operation (though perhaps not entirely). However, the factors that currently deter EV adoption include lithium mining, range, energy efficiency, and initial investment.
And, of course, it’s worth mentioning that the initial cost of purchasing an EV is nearly 4x-5x higher than regular gas cars. Naturally, the burden of these costs falls upon the end consumer, most of whom cannot afford to buy one at this stage. The majority of the EV development costs boil down to the manufacturing and assembly of the battery pack, influenced by a metric known as cost per energy capacity ($/kWh).
If we revert to the beginning of the 2010s, the average cost per kWh for Li-ion cells amounted to a whopping $1,110/ kWh – reflected in an era when the electric vehicle industry was almost non-existent. This can also be partly attributed to the difficulties in mining a rare-earth element such as Lithium. However, with significant improvements in technology and rising demand for EVs, costs dropped by 89% to about $186/ kWh as per current levels.
Arguably, these levels are still not enough to compete against ICE-powered vehicles. In an interview with Road & Track, Mercedes-Benz C.T.O., Markus Schäfer stated: “Coming to [a battery price of] 50 US dollars per kilowatt, which would lead to comparable cost basis to an ICE engine, I would say this is far out there […] I don’t see that with the chemistry that we have today.”
He further explained that it’s nearly impossible to achieve price parity with that of gas-powered vehicles. Notably, this is due to limitations with current battery technologies. The perfect formula for equivalent high energy density batteries is probably still under work or hasn’t been discovered yet. More so, even after discovery comes to the challenge of understanding its physical and thermal characteristics, testing, manufacturing, and minimizing distribution costs to make it plausible for global markets.
The short version – we still have a long way to go, and it won’t be anytime soon!
