Gartner: EV production will be cheaper than gasoline cars by 2027

By 2027, producing battery electric vehicles will on average be cheaper than producing comparable internal combustion engine vehicles, thanks to new manufacturing methods that reduce production costs. This was stated by research firm Gartner in its report. Manufacturing costs will fall much faster than battery costs, which are the most expensive component of an electric vehicle and currently account for about 40 percent of the vehicle's price.

Gartner said its analysis is based on innovations that streamline manufacturing. These include centralized vehicle architectures and the introduction of “gigacastings”—large iron castings used to produce complex, large vehicle components—which help reduce manufacturing costs and assembly time. The new technologies mean that the cost of producing battery electric vehicles will reach parity with the cost of internal combustion engine vehicles sooner than expected, but they will also make some repairs to battery electric vehicles significantly more expensive, said Pedro Pacheco, vice president of research at Gartner.

Gartner estimates that the average cost of repairing the bodywork and battery of an electric vehicle after a serious accident will rise by 30 percent by 2027. This could make vehicles involved in serious collisions more likely to be written off, because repairs could cost more than their residual value.

The high cost of repairing electric vehicles is already causing concern among potential buyers. Gartner said that if lower manufacturing costs came at the expense of higher repair costs, this could provoke a negative reaction among consumers.

Gartner also said that about 15 percent of electric vehicle manufacturers founded over the past decade will go bankrupt or be acquired by another company by 2027. “This does not mean the electric vehicle industry is collapsing. It is simply entering a new phase in which companies with the best products and services will prevail over the rest,” Pacheco said.