ICE-EV price gap coming down sharply
New research has revealed a significant narrowing of the ICE-EV price gap during the last six years.
According to analysis carried out by Jato Dynamics, the gap between traditional petrol and diesel vehicles to electric equivalents has come down from 51% to just 18%.
It says the two price points have converged due to an average 11% decrease in EVs coupled with a 14% rise in internal combustion engine models.
Its report, ‘Closing the gap: The progress towards affordable EVs and the rising competition from China’ also found that average EV prices in the UK remain 122% higher than in China. This suggest Chinese brands are in a strong position as they muscle in on the UK car market.
EV sales in China grew 40% to 11 million units last year, accounting for two thirds of all EV registrations.
Felipe Munoz, global analyst at Jato Dynamics, said: “The narrowing of the BEV-ICE price gap cannot only be attributed to the availability of cheaper BEVs on the market.
“Although carmakers’ electric offerings are improving in terms of both quality and affordability, ICE cars have risen in price overall. This is a result of factors such as increased regulation, stricter standards and the introduction of more high-tech features, all of which have combined to hike the final retail price of these vehicles.
“In the meantime, electric cars have benefitted from lower battery costs, which has caused BEV prices to decline.”
