When will electric cars be cheaper than fuel cars? Technological progress and economies of scale will be key factors in reducing costs

my country has 2 million new energy vehicles, but electric vehicles are still very dependent on subsidies and have no price advantage over fuel vehicles. When will new energy vehicles be able to get rid of their dependence on subsidies and become cheaper than fuel vehicles?

At present, the price difference between the electric version and the fuel version of the same model is between 50,000 and 80,000 yuan, mainly in the power system. Currently, batteries account for about 40% of the cost of electric vehicles, which is an important reason for the high price of electric vehicles. However, there is a lot of room for battery costs to fall. With technological progress and large-scale battery production, the cost of power batteries in my country has fallen by 79% from 2010 to 2017.

The Ministry of Industry and Information Technology proposed in the "Medium- and Long-Term Development Plan for the Automobile Industry" that "by 2020, the specific energy of the power battery system of new energy vehicles will strive to reach 260wh/kg and the cost will be reduced to less than 1 yuan/watt-hour."

Canceling subsidies is an inevitable trend. As subsidy policies are tightened, automakers will shift most of their focus to the field of new energy vehicles. Technological advances and large-scale mass production will eventually reduce the overall selling price of pure electric vehicles.

In June this year, after the implementation of the new subsidy policy, those electric vehicles with low prices and low mileage have been eliminated from the market.

In addition to production costs, pure electric vehicles also have huge R&D costs. Since current sales are not high, the R&D costs of each mass-produced pure electric vehicle are very high. When electric vehicle sales increase, battery costs decrease, and economies of scale are fully utilized, the price of pure electric vehicles will also decrease.

Sun Liqing, associate professor at the School of Mechanical and Vehicle Engineering of Beijing Institute of Technology and member of the Electric Vehicle Professional Committee of the China Electrotechnical Society, believes that for electric vehicles with a range of 600 to 800 km after five years, the battery cost will account for 20% to 30% of the entire vehicle. In addition, the cost of research and development has been reduced due to scale, so it is reasonable that the purchase price of electric vehicles is cheaper than that of fuel vehicles.

In the next five years, it is not a fantasy that pure electric vehicles will be priced lower than fuel vehicles.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.