Fresh studies conducted by industry experts estimate that dropping battery costs will account for EV costs falling lower than ICE vehicles (internal combustion engine) in the next ten years. This has raised speculations that there will be a tipping point where the reason to shift to EVs will be more about them being cheaper to buy, and not just about it being cheaper to run or being green.
The highlight here is the steady drop in the cost of batteries due to economies of scale. But there’s more. Prices of ICE vehicles will eventually go up thanks to it attracting stronger emission restrictions. Now, batteries make up for more than half of the cost of an EV, and with a ramp up in mass production of batteries imminent, sources state that battery costs are set to fall by close to 77 per cent between 2017 and 2030. It is believed that the US and European markets will be the first to reap the benefits of these price drops, before they are later felt across the globe.
Let’s talk about how our country could make a difference. India is a preferred destination for cost effective production of components and vehicles. So, it makes sense for the government to plug the upcoming global requirement for batteries by pushing to enable the suppliers with the necessary R&D, and scale of operations. If this goes the intended way, imagine how much revenue can be generated through this avenue.
