Electric cars could cost the same as gas-powered ones as soon as 2025 — so long as you buy small
- Electric cars could cost the same as gas-powered ones as early as the mid-2020s.
- That's only if shoppers go small, according to new analysis from the International Energy Agency.
While price is still one of the biggest barriers to widespread electric car adoption, EVs could cost the same as gas-powered ones as soon as 2025, a new analysis said — but there's a caveat.
It's as long as shoppers buy small, according to the International Energy Agency's latest global EV outlook.
"Our current expectation is that we can see price parity in small and medium-sized electric cars in North America and European markets somewhere in the mid-2020s," Timar Guell, the IEA's energy technology policy head, told Reuters.
There's a lot of talk about when the cost of an EV might match that of an internal combustion engine vehicle. Certainly, there are some more affordable electric models, bolstered by the help of (albeit limited) EV tax credits, and costs are coming down.
Still, the average new EV cost $58,940 in March, according to Kelley Blue Book, while the average new gas-powered car went for $48,008.
Parity would be huge for boosting EV adoption in the US, which stood at around 6% of the US market last year.
But hitting a more level price point would require a compromise on the part of American consumers.
Generally, US car buyers largely lean toward SUVs and pickups. The country's top-selling vehicles last year were the Ford F-Series, the Chevrolet Silverado, Ram pickup lineup, and Toyota RAV4. And trucks and SUVs are on pace to account for 78% of new-vehicle retail sales this month, according to J.D. Power.
Those vehicle buyers aren't likely to be in luck in the near-term if they want to go electric but are waiting for prices to drop.
Bigger battery-powered vehicles have batteries that are two- to three-times larger than small cars, according to the IEA, which requires more critical minerals that are costly.
"For larger cars like SUVs and pick-ups, purchasing parity is likely to come later, probably into the 2030s," Guell told Reuters.