Achi news desk-
Battery electric vehicles will, on average, be cheaper to produce than a comparable internal combustion engine by 2027 thanks to new manufacturing methods that lower production costs, market research firm Gartner said on Thursday.
Gartner expects production costs to fall significantly faster than battery costs, which are the most expensive part of an EV and account for about 40 percent of the vehicle’s price.
Gartner said its analysis was driven by “innovations that simplify production costs such as centralized vehicle architecture or the introduction of gigacastings that help reduce manufacturing costs and assembly time.”
Gigapresses are giant casting machines pioneered by U.S. market leader Tesla TSLA.O to make large single pieces of vehicle underbodies, streamlining production and reducing robot work.
“This (the new technology) means that BEVs will reach ICE cost parity much faster than initially expected, but at the same time, it will make some repairs to BEVs much more expensive,” said Pedro Pacheco , Vice President of Research at Gartner.
The market research firm expects the average cost of electric vehicle body and battery repairs after a serious crash to rise by 30 percent by 2027. That could make vehicles that suffer a collision more likely to be written off completely, as Gartner adds that the repair may cost more than the residual value.
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High costs associated with repairing electric vehicles are already a concern among potential buyers. Gartner said there could be a backlash from consumers if reductions in production costs come at the expense of higher repair costs.
It also expects that by 2027, around 15 percent of electric vehicle companies founded since the last decade will have been acquired or bankrupt.
“This does not mean that the electric vehicle sector is crumbling. It simply begins a new era where companies with the best products and services will win over the rest,” Pacheco said.
