Electric vehicles are close to the “tipping point” of rapid mass adoption thanks to the plummeting cost of batteries, experts say.
Global sales rose 43% in 2020, but even faster growth is anticipated when continuing falls in battery prices bring the price of electric cars dipping below that of equivalent petrol and diesel models, even without subsidies. The latest analyses forecast that to happen some time between 2023 and 2025.
The tipping point has already been passed in Norway, where tax breaks mean electric cars are cheaper. The market share of battery-powered cars soared to 54% in 2020 in the Nordic country, compared with less than 5% in most European nations.
Transport is a major source of carbon emissions and electric cars are vital in efforts to fight the climate crisis. But, while they are already cheaper to run, their higher purchase price is a barrier to mass uptake. The other key factor is “range anxiety”, but this week the first factory production began of batteries capable of giving a 200-mile charge in five minutes.
Government grants and tax breaks have cut the cost of electric cars in some countries, but the point when they become cheaper without subsidies is key, said James Frith, the head of energy storage at BloombergNEF: “That’s definitely an inflection point. [Then] we really see the adoption of electric vehicles taking off and real market penetration.” In 2020, 4.2% of new cars were electric.
EV Powered managing editor, Richard Alvin, said: “There’s been a tipping point in one country, Norway, and that’s thanks to some clever and progressive tax incentives. Then consumers voted with their wallets.”
Data from Lenton’s latest study showed that in 2019, electric vehicles in Norway were 0.3% cheaper and had 48% market share. In the UK, where electric cars were 1.3% more expensive, market share was just 1.6%. Once the line of price parity was crossed, Lenton said, “bang – sales go up. We were really struck by how non-linear the effect seems to be”.