The costs of producing electric cars are falling. Thanks to innovative technologies such as “gigacasting” and reduced battery costs, the production of electric vehicles can be 20% cheaper. This reduction, combined with the use of the battery as a structural element, promises significant savings with a positive impact on final prices for consumers.

Lower production costs

According to Pedro Pacheco, vice president of research at the American consulting and research company Gartner, thanks to new production technologies and a reduction in the cost of batteries, the construction of electric cars will be cheaper than thermal cars. After a few years. Indeed, according to him, production costs fall faster than expected, thanks to innovations like gigacasting. According to him, this technique can reduce production costs by at least 20%. But that’s not all, because the use of the battery as a structural element of the car can also lead to other significant savings, and of course this will have a positive effect on the final price of vehicles, to the delight of consumers.
He added that while battery prices have fallen over time, falling assembly costs are a key factor that will allow electric cars to compete with thermal cars sooner than expected. But before electric cars flood the market, experts say it will be extremely important for automakers use cheaper modelsas EV adoption has slowed in a number of markets, including the United States and Europe.

Parity will be reached in 2027

The expert added that this tipping point will be reached earlier than expected.
The answer to when these savings translate into lower prices at dealerships varies by manufacturer, but on average, Price parity between electric and thermal models should be achieved by 2027. He said new entrants such as BYD and Tesla can afford to lower prices because their costs are low enough to do so without too much of an impact on their bottom lines. On the other hand, he specifies that this price war can be fatal for startups who are facing many difficulties in this year 2024. Indeed, China’s Nio has recorded huge losses and must now recover to stay in the race. Polestar, whose share price plummeted after its IPO, and Lucid, which cut its 2024 production forecasts by 90%. We can also mention Fisker, which is struggling and negotiating a deal with Nissan to have a financial lifeline. Finally, HiPhi, another Chinese manufacturer, has closed the curtain for the next six months… So the war is merciless in the world of electric cars. Not everyone will survive!