Speed bump on electric car price parity road

author: FutureCar Staff    

Electric cars are on track to become more affordable than petrol vehicles in the near future, according to a report by researchers at the University of Exeter in the UK. The study suggests that battery-electric vehicles could achieve price parity with fossil fuel equivalents within the next three years, with Europe leading the way by reaching this milestone in as little as one year. China is expected to follow suit within two years, while the US is projected to catch up within three years for medium-sized cars.

The researchers also noted that the timeline for price parity could be accelerated if governments provide subsidies for potential buyers. However, this news might not be well-received by Australian drivers, as the government of New South Wales recently confirmed plans to scrap a $3,000 subsidy on electric vehicles, following in the footsteps of the Victorian government.

The analysis, conducted by the Rocky Mountain Institute and Bezos Earth Fund, considered electric vehicle adoption in Europe, the US, China, India, and Japan. The findings revealed that electric cars have already become more affordable to own and operate than petrol and diesel cars in Europe and China. The US is expected to reach this point by 2024 or 2025.

The study also predicted that a second tipping point, where electric vehicle prices equal those of petrol and diesel cars, would be reached in all three regions (Europe, China, and the US) by 2026 for small and medium-sized cars. Furthermore, price parity for electric cars is forecasted to occur in India by 2027 and in Japan by 2030, with the delay in Japan attributed to strong hybrid vehicle sales.

It is important to note that these forecasts do not account for electric vehicle subsidies. The report emphasized that "the tipping point for the consumer will be even earlier where governments provide them." Simon Sharpe, the project policy impact lead, suggested that governments could further promote low-emission transport by implementing deadlines for petrol car sales, road taxes, and the construction of more charging stations.

Despite the positive outlook for electric cars globally, the NSW government is expected to eliminate the $3,000 rebate for new electric vehicle purchases and stamp duty exceptions in its upcoming budget. This decision comes after Premier Chris Minns expressed concerns that the subsidy could increase vehicle prices. Similarly, the Victorian government ended its $3,000 electric car rebate in June.

Behyad Jafari, the chief executive of the Electric Vehicle Council, expressed disappointment over the removal of state-based rebates, as they have significantly contributed to the adoption of low-emission cars in Australia. Jafari urged politicians from both the coalition and the Greens to oppose these actions, highlighting the negative consequences of fewer electric vehicles, such as increased air pollution, continued dependence on foreign oil imports, higher carbon emissions, and added financial strain on households.

It is worth noting that other states and territories in Australia, including Queensland, Western Australia, South Australia, and the ACT, continue to offer incentives for electric vehicles.

Australian Associated Press

FutureCar Staff