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Gasoline vehicles may be cheaper than their electrified counterparts right now, but that may change in the next 10 years.
Rod Lache, an analyst with Deutsche Bank, wrote about the price shift in a letter to clients, according to Steve LeVine with global economy website Quartz.
“Over the next decade, the cost of electric and combustion vehicles will more or less equal out,” summarized Levine. “Electrics could even be cheaper than combustions vehicles.”
As these prices get closer together, Lache projects that EV sales will grow significantly.
Lache lists two main dynamics leading to the price reduction. The first is the cost of batteries, which could reduce by as much as 50-percent to lower the price of EVs. Secondly, Lache says the increasingly strict fuel economy standards will raise the price of internal combustion engines (ICE).
By 2025, Lache estimated that an ICE drive train on a new vehicle will cost $7,000 to $7,600. A powertrain on a 200-mile range EV with a 47 kilowatt-hour battery, in comparison, will cost approximately $6,100.
Not everyone is as optimistic for the future of EVs. ExxonMobil estimates that by 2025, fewer than 100 million compressed natural gas, hybrid and electrified vehicles will be on that road. By these numbers, alternative fuel vehicles will account for less than 8-percent of the world’s light duty fleet.
Even 25 years down the road, ExxonMobil believes alternative fuel vehicles be in the minority, making up less than half of the 1.7 billion light duty vehicles worldwide. The biggest growth for will be by full hybrids, with approximately 600 million vehicles. Plug-in hybrids, electric and fuel cell vehicles will constitute only 100 million vehicles, according to the graph.
This projection is questionable, however, given that its source is a $400+ billion oil and gas corporation that lobbies against alternative fuel vehicles.