As electric vehicles become more popular, one of the things holding many people back from switching from ICE is the sticker price and cost of setting charging equipment, both of which are quite high for the average Joe. This is despite the fact that EVs make up for the upfront cost with the low cost of ownership. In this article, we examine four major ways the EV industry can make electric models more affordable for the population.
The battery, while a crucial component, is the major culprit of the higher prices of electric vehicles, accounting for about a third of the cost. EV makers walk a fine line between extending the range to assuage range anxiety and keeping costs down.
It is no surprise that the EV industry is fixated on reducing the costs of the battery packs. Elon Musk, the CEO of Tesla, believes cutting the cost of the battery is what has to happen for his dream $25,000 battery powered car that won’t compromise with range to see the light of day.
While battery cost has dropped drastically, by up to 75% in the last fifteen years, much still has to be done by way of research to make batteries cost less.
There are reasons to hope though. Graphene Manufacturing Group (GMG) in Australia, for example is getting ready to introduce its graphene based batteries that use aluminium and store more energy than lithium-ion batteries, while costing far less to manufacture. If this succeeds, we may have our affordable EV sooner than expected.
Another way to cut cost of making EVs is for different companies to collaborate in development. This allows all parties to pool their expertise, rather than spending exorbitant amounts pursuing separate R&Ds. For example, Tesla and Panasonic has a battery venture run by the two companies, similar to Toyota and Subaru jointly developing an electric vehicle platform that will be used by both companies for their future models. Toyota brought its experience with making battery based hybrids to the table while Subaru contributed its expertise in making all-wheel drive systems.
EV makers can also keep costs down by attaining volume production. With more units produced, the bill of materials reduces as bulk purchases allow for lower prices of components. The manufacturing process also gets less expensive, which means the price paid by the consumer is reduced. This is the reasoning behind Tesla ramping up production by building out more manufacturing plants all over the world.
The cost of charging equipment is another obstacle that has to be cleared as it represents a sizable investment for many potential EV buyers. Finding a way to make faster home and public charging equipment cost less will lower the overall cost of acquisition. One way is by lobbying governments to offer more incentives or subsidies for electric vehicle supply equipment (EVSE) while research is on-going on making them cheaper.
While there may be no silver bullet that will make cheap EVs appear, a combination of lower battery and charger costs, strategic partnerships and volume production can get us to where the average Joe can switch to the more environmentally friendly electric vehicles that don’t cost an arm.
One way our company contributes to the faster adoption of electric vehicles is through offering our engineering services for designing both home and public EV charging installation. Contact us to see how our team can assist you in bringing your EVSE facilities to life.