At which price point electric cars will become mainstream?
Price is still a big obstacle of electric cars.
Previously I wrote an article about which kind of electric car has the biggest potential to become popular. I did it by analyzing the most sold cars in Europe. Then I compared the offer to demand on electric cars. The conclusion was that the current offer of electric cars hasn’t enough superminis. This is the kind of cars that most Europeans buy when there is a vast offer to choose from.
But that article isn’t complete. To know how to make electric cars mainstream, not only we have to determine the most popular kind of car, but also what is the price buyers are willing to pay.
A technology becomes obsolete when there is a new one that the user feels it’s better in the fields he considers most important, as always price is a very important factor. We all know that driving an electric car saves us money in the longer run, but electric cars will only become mainstream when they have similar or cheaper prices than their ICE counterparts.
Let’s see the starting prices in Germany of the ten most sold cars in Europe. I’ll use Germany because it’s the biggest European auto market.
Top 10 cars sold in Europe (first half of 2016):
- Volkswagen Golf: 321.772 (units sold) – 17.850 €
- Renault Clio: 211.139 (units sold) – 11.990 €
- Volkswagen Polo: 204.227 (units sold) – 12.600 €
- Ford Fiesta: 165.347 (units sold) – 9.990 €
- Opel Corsa: 153.001 (units sold) – 11.995 €
- Nissan QASHQAI: 143.266 (units sold) – 19.990 €
- Peugeot 208: 141.115 (units sold) – 12.600 €
- Skoda Octavia: 139.213 (units sold) – 17.190 €
- Volkswagen Passat: 128.877 (units sold) – 26.400 €
- Ford Focus: 128.857 (units sold) – 12.990 €
Every supermini in the top ten has a starting price below 18.000 € and if we exclude the Volkswagen Golf, all superminis can be bought for less than 13.000 €.
Electric superminis must be priced below 20.000 € before any government incentive to have any chance to become mainstream in Europe. This would be possible today if automakers wanted to.
A 40 kWh battery costs automakers less than 6.500 € and the rest of the electric car is cheaper than its ICE counterparts. An electric supermini with a 40 kWh battery that is able to charge 100-150 kW at DC fast chargers is range anxiety free for most drivers. We just need to have a visible, vast and reliable public charging network, this is the argument of Carlos Ghosn, CEO of Renault-Nissan and I agree with him.
Today the Volkswagen e-Golf costs twice as much as the ICE Golf, the same applies to the Renault Zoe when compared to the Clio. If automakers don’t make electric cars cheaper, governments should make ICE cars more expensive with higher taxes. Only when selling polluting cars becomes difficult, automakers will decide to produce electric cars in large volume and price them to succeeded.
The Opel Ampera-e is about to arrive with a realistic 238 miles (383 km) EPA range and a price-tag believed to be between 35.000 and 40.000 €, with it range anxiety is no longer an issue. Now the question is when will the electric car below 20.000 € – before any government incentives – arrive? And at last but not the least, which one will it be?
In the near future, the electric car that I see with higher chances is the Renault Twingo ZE. I’m still confident that Renault will release it in 2017 for less than 20.000 € – before any government incentives – with battery included. The Nissan Micra EV is also a possibility.