Electric cars are generally more expensive to purchase than their petrol or diesel equivalents. This is mainly due to expenses related to efficiencies of scale and the cost of the batteries. As scale production of electric vehicles has increased and battery costs reduced the cost of electric cars has come down. Lithium battery prices have also dropped 80% between 2010 and 2016 with the prospect of further substantial reductions in cost over the next five years. They are dropping at 20% per annum and accelerating. These continuing trends will mean the overall cost of ownership of EVs will compete with ICE cars in some markets such as Europe from 2017/2018 and beyond.

As far as running costs are concerned EVs are about 70% cheaper to run (check out our calculator for yourself) and have greatly reduced servicing costs. While production costs reduce with greater efficiencies of scale and batteries costs continue their downward spiral expect to see continued reductions in the price of EVs together with extened range. To give an idea of the investment that’s been made in battery production consider this. As of September 2018 there were 45 mega battery factories planned or being built – this is up from 3 in 2015.

We are now beginning to see these types of vehicles on sale in Australia with the Hyundai Ioniq on sale for $46K with a range of 280kms or the Hyundai Kona at $60K with a range of close to 500kms. Still not cheap but falling in the price range of more Australians. Expect to see this trend continue and the actual sticker price beginning to compare with ICE vehicles over the next three to five years. Total cost of ownership will already be cheaper before then due to the minimal servicing and reduced fuel expense.