Electric cars will remain significantly more expensive for European carmakers to produce than combustion engine models for at least a decade, according to new research. Data compiled by consultancy Oliver Wyman for the Financial Times found that while the total cost of manufacturing a compact emissions-free vehicle will fall by more than a fifth by 2030, to
€16,000, this will still represent a 9 percent gap when compared with petrol or diesel models. The findings highlight the threat to the profit margins of groups including Germany’s Volkswagen and France’s PSA, even as the price of electric car batteries – their most expensive component – is set to almost halve over the next few years.
European carmakers, faced with a sharp decline in overall demand for their legacy products in the wake of the Covid-19 crisis, are set to unveil dozens of new electric cars over the next few years. “There can be money made from electric vehicles, but it will be lower than [petrol and diesel models] historically,” said Simon Schnurrer, an automotive partner at Oliver Wyman.