Electric vehicles to cost the same as conventional cars by 2018

The cost of owning an electric car will fall to the same level as petrol-powered vehicles next year, according to bold new analysis from UBS which will send shockwaves through the automobile industry.

Chevy Bolt

Experts from the investment bank’s “evidence lab” made the prediction after tearing apart one of the current generation of electric cars to examine the economics of electric vehicles (EVs).

They found that costs of producing EVs were far lower than previously thought but there is still great potential to make further savings, driving down the price of electric cars.

As a result, UBS forecasts that the

“total cost of consumer ownership can reach parity with combustion engines from 2018”,

with this likely to happen in Europe first.

“This will create an inflexion point for demand,”

the analysts said.

“We raise our 2025 forecast for EV sales by ~50pc to 14.2m – 14pc of global car sales.”

If the prediction comes to pass, traditional car industry giants could face ruin. Germany’s Volkswagen Group – the world’s biggest car company – is racing to catch up with rivals’ investment levels in electric drivetrains, the components which deliver the power into the wheels, having largely ignored the technology in the past.

UBS’s research was to help understand what it called the

“most disruptive car category since the Model T Ford”.

The findings are based on its deconstruction of a Chevy Bolt, which it considered to be “the world’s first mass-market EV, with a range of more than 200 miles”.

UBS’s analysts deconstructed the Chevy Bolt (Image: UBS)

The 2017 car – which cost $37,000 – was taken apart piece by piece and the parts analysed. UBS said that the Bolt’s electric drive was $4,600 cheaper to produce than thought,

“with much cost reduction potential left”.

 “We estimate that GM (which produces the Bolt) loses $7,400 in earnings before interest, and tax on every Bolt sold today, mainly due to a lack of scale.”

Read more: The Telegraph via Fuel Included News