Will the electric car soon be as cheap as the petrol car?

Electric cars and plug-in hybrids are becoming more common on our streets. Although the price tag for buying an electric car is still higher than for fossil-fueled alternatives, even on the used market, developments in car batteries are moving forward rapidly.

Some believe that the price difference between electrified and fossil-fueled cars will soon be eliminated. We asked Karl Wahlin, an analyst at our sister company Bilpriser, how he views the issue.

Falling prices of batteries

In December, consulting firm BloombergNEF published its annual battery price comparison. It showed that prices had fallen nearly 13 percent in 2020, with the average price for batteries in electric passenger cars landing at $126 per kilowatt-hour. The corresponding price in 2010 was over $1,100 per kilowatt-hour – a price level that has fallen 89 percent in ten years.

New electric car prices up - used ones down

The price of new electric cars has also dropped significantly in recent years, and above all, there have been more private leasing options with a different price level. However, we see a different trend in the used market – prices have gone up.

– The price picture for used electric cars has been stable and rising in recent years. This is despite the rapid technological development in terms of both capacity and range for batteries. But anyone who thinks there is no interest in an electric car of a slightly older model on the used market is wrong, these cars sell quickly and often expensively, says Karl Wahlin, analyst at Bilpriser .

Continued high demand on the second-hand market

Some experts believe that the time is approaching – when battery costs have reached a level that makes electric cars cost-effective to produce in more product segments, and thus also competitive in price with fossil-fueled cars. Some point to the year 2023, others between 2025-2030. Will this then affect the used prices of electric cars?

– In the medium term, we do not believe that new prices for electric cars will change significantly. The trend of falling battery cell prices has not had any significant impact so far. That said, we still believe in a stable price level for used electric cars, there is high demand on the used market, says Karl Wahlin.

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