Maarten Vinkhuyzen published a fascinating report today on dropping EV battery prices and how much more they are expected to drop in the next few years. “Plummeting battery prices will push BEVs below parity in 2 to 4 years in Europe. In China, sooner — it is happening now for some models,” he writes. “I expect that battery prices will drop by 70% in the next five years. Companies with some inside knowledge — like CATL, BYD, Volkswagen Group — as well as the IEA have suggested this in press releases and reports. This will have an effect on the retail prices the carmakers set.”
I encourage you to first read his full piece on the topic. Though, the article combined with a couple of other recent ones hit me with the thought in the headline above, which I’ll explain.
The other stories were Kyle Field’s review of the new 2026 Nissan LEAF and Tesla’s release of the new, cheaper-base-price Tesla Model 3 and Model Y.
A little more than a decade ago, the electric car market was young and exciting, but there was one core problem: you could either buy a long-range electric car or you could buy a semi-affordable, mass-market electric car, but you couldn’t get a long-range affordable electric car. Then, in 2016, the first long-range affordable electric car was launched. No, not the Tesla Model 3, but the Renault ZOE, which offered around 200 miles of range. Then you had the launch of the Chevy Bolt and the Tesla Model 3. A new era had arrived. A couple hundred miles of range for around $40,000 was a leap forward, and it transformed the electric car market.
Since then, numerous electric vehicle models have been introduced in different classes and segments of the market, and the market has grown and grown — especially in China and Europe, but also in Australia, the US, various Asian countries, and many other countries around the world. It’s been fun to watch, track, and write about. But something has been going on that I think has gone a bit under the radar and has hidden how much the EV revolution is proceeding.
Range has slowly, gradually grown in EV models. Rather than 200 miles or so, these semi-affordable EVs are getting 250, 300, 325 miles of range. Automakers have been packing more miles into the same models, which is what stood out to me with the new LEAF and new Teslas. Perhaps this gives consumers what they want more (even though I sometimes feel like it’s overkill), but it also sort of just hides the progress that’s being made. It’s not like we’ve gotten a milestone $20,000 or $25,000 EV. But we could…. We’re getting to the point where the industry could make that next big step downward. That was basically the point of Maarten’s article, of course.
It reminds me of that old quote about how change takes a long time to come but then comes suddenly. While batteries have been improving, improving, improving, EV choice and EV specs have been improving, but in an incremental way and often just gradually bumping up the driving range. I expect we’re reaching a point now where a few things will happen:
* Automakers will be able to offer seriously affordable models, especially if they go the 2016 route of offering some revolutionary base trims with 200 miles of range or so — not for everyone, but for people like me who feel no need for more and would rather save some money.
* EV models in other vehicle classes will get more and more competitive on upfront cost with gasmobiles — sort of like what we’ve been seeing with the Cadillac lineup and sales.
* And, yes, some models will follow the trend we’ve been seeing and continuously get bumps up in range, gradually rising from the 300+ miles we’re seeing now to 400+ miles on mid-market and luxury class vehicles.
In other words, we should start getting significantly more variety in EV choice. And that should significantly expand the market.
