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Analyst: Electric cars will cost less than internal combustion within a decade


gigafactoryq4ruuo0The main differentiator will be battery economies of scale exemplified by Tesla’s Gigafactory which is now under construction outside of Reno

Electric car Analysts are often wrong but since Deutsche Bank analyst Rod Lache’s thinking lines up with mine, I’m going to go ahead and post this from Quartz on the price gap between electric cars and internal combustion within a decade.

There are two factors that could close the cost gap: The first is that battery prices are expected to drop by more than half to $100 per kilowatt hour—not because of a scientific leap, but due to engineering improvements and economies of scale, particularly at Tesla’s “gigafactory.” The second factor is that combustion engines will get a lot more expensive, Lache says. US gasoline efficiency standards, which require that light vehicle fleets average 54.5 miles a gallon by 2025, will incur added costs of $2,000 to $2,600 per vehicle. That will raise the total cost of a typical drive train—an engine, transmission, and fuel and exhaust system—to $7,000 to $7,600 per vehicle in the United States, he writes.

By comparison, using the $100 per kilowatt hour cost that Deutsche Bank expects, a 47 kilowatt-hour battery pack capable of taking a car 200 miles on a charge only would cost about $5,400. When you add in the electric motor, the entire power train would rise to $6,100—a price advantage of almost $2,000 over a combustion car.

Keep in mind this is without the cost of fuel which Electric already is an order of magnitude better than petroleum  – it costs about $1 to let the huge Tesla Model S go 100 miles so “cheap gas” isn’t even close.

Also electrics are way faster, cleaner, quieter, take less space, don’t stink are less combustable, upgradable…I could go on and on. It is no wonder that smart companies like Apple and Google are jumping into this pool.

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  1. Richard Labaš - 8 years ago

    “$1 to let the huge Tesla Model S go 100” – this is wrong. If we will go 330Wh/Mile (typical consumption of Tesla in summer), 100 miles would be 33kWh. If we are going with $0,12 per kWh, it is $4 per 100 miles, not $1. Still cheap though

  2. Enoch1680 - 8 years ago

    Within a given technology scale drives cost reductions in a predictable way. This is why Musk could move forward with confidence on the Gigafactory. See this post for links to analyst predictions and experience curves –


Avatar for Seth Weintraub Seth Weintraub

Publisher and Editorial Director of the 9to5/Electrek sites. Tesla Model 3, X and Chevy Bolt owner…5 ebikes and counting