Electric vehicle (EV) prices are on target to match those of comparable combustion models in the US by 2026, according to analysts at Goldman Sachs. Technological advancements and a reduction in the price of lithium (a key component of car batteries) can be thanked for this trend, which sees EVs continue to bridge the price gap to their combustion counterparts.
Batteries account for one-third to one-fourth of the cost of producing an electric vehicle, according to Goldman Sachs analysts. But with a 23% reduction in cost so far in 2024 and a further 20% fall expected in 2025, OEMs will be able to price their EV models more competitively than ever before.
The reason for the fall in price of lithium is due to a drop in demand, with many European manufacturers reverting to hybrid and plug-in hybrid models in the short term due to uncertainty from governments on meeting their existing net-zero pledges.
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