No matter how hard the federal push for EVs is or the spike in curiosity from consumers due to high gas prices, most EVs that are on the market or coming to market are out of reach for most consumers. With Honda and GM announcing that the companies are working together on an affordable EV, Road & Track reports that Mercedes doesn’t think an affordable EV can be done yet.
Speaking to Road & Track, Mercedes’ Chief Tech Officer Markus Schäfer doesn’t think the market will see cheaper EVs in the foreseeable future:
Coming to [a battery price of] 50 U.S. dollars per kilowatt, which would lead to comparable cost basis to an I.C.E. engine, I would say this is far out there,” Mercedes CTO Markus Schäfer told Road & Track. “I don’t see that with the chemistry that we have today.
The bulk of the cost of EVs is in the battery tech. While battery prices have dropped nearly 90 percent in the last 10 years, the average battery price is still $6,300 according to Bloomberg. And this isn’t even taking into account the price of more expensive premium EVs. From the article:
But the industry average price of $137 for a kilowatt of power for an hour (from about $1,191 in 2010) is still above the $100 threshold at an EV’s cost should match a car with an internal-combustion engine.
The price parity that everyone in the industry has been talking about for years? Not possible with current tech according to Schäfer. EV price parity is the point at which EVs can be built and sold for the same margin as gas engined vehicles. What’s needed to mass-produce the affordable batteries to make EVs cheaper will require years of work he says.
It’s a crystal ball thing to answer. And it will very much depend on mining capacity [for raw materials] and the global ramp-up of EVs. So these are the two main factors. But I would say, for quite a while we will see headwinds on the raw material side.
As of November 2021, the average transaction price of an EV was just under $57,000. This price isn’t helped by EVs like the $140,000 Lucid Air, the $93,000 Tesla Model S, or the $60,000 Cadillac LYRIQ. And while automakers claim the affordable stuff is coming, that “affordable” price point seems to be $40,000. So it may be years before we see any actual affordable EVs. You cant push for mass adoption if the masses cant afford it.