For mass adoption to be successful, EVs will need to sell for the same price as an internal combustion car while still generating a profit for the manufacturer. Despite recent supply chain problems that caused a drop in battery affordability, General Motors and Volvo now predict that will happen by the middle of the decade.
In an interview with European Automotive News At the recent launch of the EX90 electric SUV, Volvo Cars CEO Jim Rowan said he hopes to reach prices on par with internal combustion cars around 2025.
Rowan hopes technological improvements will allow for a wider range of operation without increasing the size of the battery pack, resulting in some cost savings. And while Volvo hasn’t confirmed whether the EX90 qualifies for the full $7,500 federal EV tax credit under the revised Inflation Reduction Act (IRA), Rowan said smaller EVs are Volvo’s future may be the same.
Chevrolet Equinox EV 2024
CEO Mary Barra said GM expects profits from electric vehicles to be on par with internal combustion engine vehicles by 2025, many years earlier than planned. CNBC and other media during the automaker’s investment day on Thursday.
IRAs are also a major factor in that rosy prediction. Chief Financial Officer Paul Jacobson told CNBC that the incentives are anticipated to increase electric vehicle margins in the future, adding that GM hopes to be “one of the first, if not to say first” qualify for the full $7,500 credit under the IRA, which adds new requirements for batteries -material sourcing and required domestic assembly for vehicles qualified electricity.
Both GM and Volvo believe the IRA will eventually make a stronger business case for electric vehicles, but in the interim, the IRA has made some electric vehicles more expensive—through the credit revised EV tax. sharp cut number of eligible vehicles.
2024 GMC Sierra EV Denali Version 1
GM and Volvo are just the latest examples of automakers predicting lower EV prices will make them more competitive with internal combustion cars and trucks. When electric vehicles and internal combustion engine vehicles pass parity, many people predict one of the most transformative times unprecedented in the auto industry, although one of the essentials—battery pack price—a decline in affordability in 2021 and into 2022. That remains true even as battery factories surge due to raw material constraints. This year The price of used electric vehicles has also increased sharplytherefore, there are many market factors that need to be matched for everyone to agree that electric vehicles are not more expensive than before.
Not all automakers see the move to building electric vehicles in the US as part of a pending balance. subaru The company claims to have phased out U.S. electric vehicle assembly entirely because of high labor costs.
