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New research: EVs will be cheapest vehicles to manufacture by 2027

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STAMFORD, Connecticut: Market research firm Gartner has said that due to new manufacturing methods that are reducing production costs, battery-powered electric vehicles (EV) will be cheaper on average to produce than a comparable internal combustion engine by 2027.

Gartner added that production costs will fall considerably faster than the costs of batteries, which are the most expensive part of an EV and account for some 40 percent of a vehicle’s price.

Its analysis was driven by “innovations that simplify production costs such as centralized vehicle architecture or the introduction of gigacastings that help reduce manufacturing cost and assembly time,” it further added.

Gigapresses are casting machines introduced by US market leader Tesla to produce large single pieces of vehicle underbodies, streamline production, and reduce the work of robots.

Pedro Pacheco, Vice President of Research at Gartner, said, “This new technology means BEVs will reach ICE cost parity much faster than initially expected, but at the same time, it will make some repairs of BEVs considerably costlier.”

However, the average cost of repairing an EV body and battery after a serious accident will rise 30 percent by 2027, which could make vehicles suffering a collision more prone to a total write-off, the market research firm stressed, noting that repairs could cost more than the residual value of vehicles.

It further added that there could be a consumer backlash if reductions in production costs come at the expense of higher repair costs.

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