The Investment Bank UBS’ recent report compares the costs of production and ownership of EV vehicles to their petrol and diesel equivalents (combustion engine vehicles).
At present UBS estimate that each EV car produced loses the manufacturer money, this is mainly down to the lack of cost savings achieved in large scale production. When examining the total cost of ownership for the consumer, UBS predict that ownership ‘cost parity’ between EV’s and combustion engine vehicles could be reached as soon as next year 2018. UBS put this down to the lower number of consumable parts found in an EV. If consumers vote with their wallets, increased demand for EV’s could lead to production cost savings and UBS predict that manufacturers could achieve similar profit margins to those found in internal combustion engines vehicle as early as 2023. This date could be the ‘tipping point’ where more manufacturers enter EV production and it may spell the beginning of the end of the internal combustion engine vehicles.
UBS have made quite a bold statement; manufacturers currently appear to be making a loss on each EV produced (unless they receive government grants or other form of incentives to pass on to consumers), and not all consumer buying decisions are based solely on vehicle life-time costs.
However, the UBS report gives ‘food for thought’ about the immediate future.