As per a recent analysis conducted by the market research firm Gartner, it is projected that by 2027, the cost of manufacturing battery electric cars (BEVs) will be lower than that of internal combustion engine (ICE) vehicles. The notable increase in cost-effectiveness can be ascribed to inventive manufacturing methodologies that are substantially diminishing production costs.
According to Gartner, the cost of making electric vehicles will drop far more quickly than the cost of batteries, which currently account for about 40% of the entire cost of an electric vehicle.
The conclusions drawn by the company are predicated on innovations that reduce production costs, like the use of gigacastings and centralized vehicle architecture. The dominant business in the U.S. market, Tesla, popularized the notion of “gigacastings,” which uses huge casting machines to produce substantial single sections of vehicle underbodies. Robotic labor is reduced and production is made simpler with this method.
According to Pedro Pacheco, vice president of research at Gartner, battery electric vehicles (BEVs) will become cost-competitive with internal combustion engine (ICE) vehicles far sooner than predicted with the adoption of new technologies. But he also pointed out that this would result in some BEV repairs becoming significantly more expensive.
According to the company, the average cost of fixing the body and battery of an electric car after a serious collision will rise by 30% by 2027. Because the cost of repairs may surpass the vehicle’s residual value, there may be a greater chance that cars will be declared total write-offs following incidents as a result of these rising repair prices.
The possibility of expensive repair bills is already a worry for prospective owners of electric vehicles. Gartner cautions that if lower production costs are compensated for by higher repair costs, customers may react negatively.
Furthermore, according to Gartner, 15% of electric car startups that were established in the previous ten years are expected to be either acquired or declare bankruptcy by 2027. Pacheco went on to say that this tendency does not portend the demise of the electric car market. Instead, it heralds the beginning of a new era in which businesses that offer exceptional goods and services will prosper.
