Practically every automaker, from juggernauts like the VW Group or Daimler to small start-ups, is jumping into the EV bandwagon, yet sales are abysmal – and will probably will continue to be until one big problem is solved: their high prices.
According to JATO’s most recent study, which included 43 different world markets, in the first half of 2019 the average price of an electric car was 81 per cent higher than that of other vehicles. Which, along with the (mostly) limited charging infrastructure, explains why buyers shy away from purchasing them.
In Europe, the second largest EV market after China, the average price of cars registered in H1 this year totaled $34,091. By comparison, the cheapest electric car available, the Renault Zoe, is priced on average at $35,036, the Tesla Model 3 costs $67,440, and the Jaguar I-Pace exceeds the $100k mark, although all these prices exclude any incentives, which vary in each country. Thus, their total market share was just 1.9 percent, which still makes EVs a rather small niche.
The situation in the United States and Canada is quite similar. The average price of vehicles sold is slightly higher than in Europe, at $35,614 per unit, which can be explained by the popularity of vehicles like pickups or trucks that accounted for an 18% market share with an average price of $43,650. While the cheapest EV, the Nissan Leaf, starts at $32,506, the best-seller, Tesla’s Model 3, comes at $47,467 (again, excluding any incentives), making it 21 percent more expensive than the average car sold and surpassing even the average SUV or pickup truck. Factor in American’s dislike for small cars, and things become even clearer.
If there’s a silver lining in this cloud, that’s China. As JATO’s report notes, the Chinese government has put its weight behind electric vehicles and is pushing hard for electrification; moreover, local safety standards are more lax than those in the US or Europe, which allows for lower costs.
That is reflected in their pricing: while the market average sits at $26,715, you can get the Chery EQ1 city car for $20,260 or the BYD’s Yuan subcompact SUV for for just $15,279. And since this the world’s largest market for all vehicles, including EVs, it could make a difference, although electric sedans, which have a huge, 42 per cent market share, are still more expensive than the rest.
So, with the sole exception of China, do electric cars still have a long way to go before they become popular? It depends. Like we mentioned earlier, major manufacturers are investing heavily into this segment – and one good example is the new VW ID.3 that, at nearly $33,000, comes under the total market average. Moreover, costs of both manufacturing and batteries will inevitably fall, resulting in making EVs more affordable. Therefore, if we were to come to a conclusion, it would be that yes, right now EVs are niche, but they are definitely coming. It’s only a matter of time until their makers can figure out how to price them equally, or at least close to, the rest.