At which price point electric cars will become mainstream?

Volkswagen Golf mk7, the most sold car in Europe

 

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):

  1. Volkswagen Golf: 321.772 (units sold) – 17.850 €
  2. Renault Clio: 211.139 (units sold) – 11.990 €
  3. Volkswagen Polo: 204.227 (units sold) – 12.600 €
  4. Ford Fiesta: 165.347 (units sold) – 9.990 €
  5. Opel Corsa: 153.001 (units sold) – 11.995 €
  6. Nissan QASHQAI: 143.266 (units sold) – 19.990 €
  7. Peugeot 208: 141.115 (units sold) – 12.600 €
  8. Skoda Octavia: 139.213 (units sold) – 17.190 €
  9. Volkswagen Passat: 128.877 (units sold) – 26.400 €
  10. 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.

Pedro Lima

More than natural resources, are wasted human resources that bothers me the most. That's why I'm a strong advocate of a society based on cooperation, not competition, that helps every individual to reach his full potential so that he can contribute back to society. "From each according to his ability, to each according to his needs".

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10 Responses

  1. Auto Company’s ~ it’s all about service selling gas/diesel parts..

  2. Yogurt says:

    The price points will only geaduly go down until the goverments make big auto commit to electrics driving the competion…
    Toyota and Honda pushing the fraud of fuel cells in CA only hurts the adoption of EVs…
    The 20.000 € would probably ne a big price point over in Europe and I will say 25k MSRP in the US would be good as then over here it would be cheaper than the ICE equivelant after rebates…
    I hope Chevy is agressive with the Bolts price as it will help drive down the prices of all non Tesla EVs it also might take some of there customers…

  3. Kimmi says:

    Looking at the euro top 10, another thing that strikes me is that only 3 models (Golf, Passat, Clio/Zoe) have a plug-in alternative.

    When can we have an electric Qashqai?

  4. orinoco says:

    It should be kept in mind that the price of a car depends largely on the number the car is sold. So a car with much less numbers sold will always be much more expensive than a mass production car. So BEVs will stay more expensive as long as they are only sold in small numbers or until the production cost fall significantly under the ones of an ICE car. And the main price factor of an BEV that is supposed to drop significantly in the future is the battery. So it is up to the price of the battery and when it drops under a certain level, when BEVs become cheaper than ICE cars. At the moment only luxury cars like Tesla Model S/X can be produced and sold with profit. It will take some time until we reach the small cars.

    Ceterum censeo JavaScriptWhereNotNecessary delendam esse.

  5. Siimos says:

    As long as we have government incentives on purchase price we don’t see any real prices. Governments should only rise emission norms, restrict diesel use and make higher taxes on ICE cars. Cash incentives should be focused on resarche only, not on purchase price.

  6. Ralf K says:

    :quote: Now the question is when will the electric car bellow 20.000 € – before any government incentives – arrive? And at last but not the least, which one will it be? : end quote:

    BEFORE incentives – including battery
    ===============================

    Peugeot Ion MY2017 is now back at 17850 EUR list price in Germany – which is already well below 20.000 EUR.
    http://www.peugeot.de/modelle/modellberater/ion.html

    C-Zero MY2017 is currently at 19800 EUR in Germany.
    http://www.citroen.de/modelle/citroen/citroen-c-zero/ausstattungsvarianten-vergleichen.html#sticky

    After incentives in Germany:
    ========================
    Both are on this list of cars that are subsidizes by PSA and the German government:
    http://www.bafa.de/bafa/de/wirtschaftsfoerderung/elektromobilitaet/publikationen/emob_liste_foerderfaehige_elektrofahrzeuge.pdf

    With Germany incentives from both sides:
    PSA: 13000 EUR netto (2000 EUR manufacturer side on the netto price!) plus 2470 EUR tax (19%).
    Minus 2000 EUR german government incentive: makes this 13470 EUR in Germany after rebates.
    Plus delivery fee as with all new cars.

    A little more for C-Zero. But both have to cope with a 14.5 kWh battery and about 100-120 km of real-world range.

  7. Sch says:

    The incentives dont allow to see real proces.
    In the Czech republic, there are no incentives and an VW e-Up is sold for 22 500€, it is identical to the model sold in Germany (neighboring country) for 26 900€. So the German incentives (2000€ manufacturer + 2000€ government) pay only for extra profit for VW. The VAT in CZ is 21% and in DE its 19%.
    And actually my company has bought e-Ups in 2014 for 20 400 €, we were buing three of them and we are not buing other cars from VW.
    I think, that in 2018 there could definitelly be a electric cars with 40kWh for 20 000€. but only if the car makers wnat to, if there is enough competition, market force or other forces

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