Electric vehicles will be cheaper to make than ICE vehicles in 3 years: Gartner

Electric vehicles could become more affordable in near future as a US-based market research analysis hints at lower production costs and cheaper battery prices. Gartner, the US-based firm, released a research that says this change will happen as quickly as 2027. The research says that electric vehicles will become cheaper to produce compared to regular petrol and diesel cars within the next three years due to various factors.

According to Gartner, the average production cost of electric vehicles in 2027 will drop faster than the cost of EV batteries which contribute nearly 40 per cent of the overall price of such vehicles. Gartner said its analysis was based on ‘innovations that simplify production costs such as centralized vehicle architecture or the introduction of gigacastings that help reduce manufacturing cost and assembly time’.

Gigacasting is pioneered by EV makers like Tesla. It is a casting machine to make large single pieces of vehicle underbodies that not only streamlines production but also reduce work of robotics. "This (the new technology) means BEVs will reach ICE cost parity much faster than initially expected, but at the same time, it will make some repairs of BEVs considerably costlier," said Pedro Pacheco, Vice President of Research at Gartner.

Union Minister Nitin Gadkari too shares Gartner's projection of EVs costing less or as much as ICE counterparts soon. He had recently said, "Electric vehicles have become popular. The cost difference between petrol-diesel and electric variants is the major problem in higher adoption. I estimate that within one and half years, the cost of electric vehicles and internal combustion engine vehicles will be the same."

Gartner's research has also pointed out that repairing an EV body or battery after an accident will cost around 30 per cent more in the next three years. It said new technology will make it costlier to repair electric cars. “Fast reduction of EV production costs should not be done at the expense of higher repair costs, as it may generate consumer backlash in the long run," the research said.

Gartner, in its latest research analysis, also said that among all electric vehicle manufacturers founded since last decade, at least 15 per cent will be either acquired or go bankrupt by 2027. However, it clarified, the finding is not alarming. "This does not mean the EV sector is crumbling. It is simply entering a new phase where companies with the best products and services will win over the remaining," Pacheco said. EV makers like Fisker, Rivian, Polestar, Li Auto and Nio are among some of the global players that are already facing trouble to grow amid financial crisis.