One of the barriers affecting consumers’ decision to buy electric cars is the issue of cost. The good news is that a market analysis company in the US called Gartner has predicted that by 2027, the cost of producing electric cars will become cheaper than those with internal combustion engines.
Large batteries, new technologies, and development costs have contributed to the high prices of electric cars. However, innovations in modern manufacturing techniques and improvements in the design of electric cars will quickly make battery-powered vehicles more affordable.
Researchers at Gartner believe that original equipment manufacturers (OEMs) are gradually introducing improvements to simplify production costs and assembly time, such as the introduction of gigacasting technology (manufacturing a substantial part of the vehicle using a single piece of metal instead of welding together many small components). Such new methods will force traditional manufacturers to update early to avoid being left behind.
Unfortunately, these new technologies may also affect customers’ repair bills and insurance costs. Although Tesla’s gigacasting technology has allowed the company to gain a price advantage over other electric car manufacturers, the cost of repairing the company’s vehicles is also very expensive.
As other car manufacturers follow Tesla’s lead in adopting gigacasting, Gartner predicts that the average cost of repairing severe body or battery damage will increase by 30%. This could lead to more debts and even cause some insurance companies to refuse coverage for certain vehicles.
Nevertheless, the sales of electric cars are expected to continue to rise globally in the coming years. Gartner estimates that the number of delivered electric cars will increase to around 18.4 million in 2024 and 20.6 million in 2025, a significant increase from 15.4 million in 2023.
In addition, Gartner also provides insights into the competition in the electric car industry. The market analysis firm notes that many startups have heavily invested in electric car production due to the quick and easy profit expectations in the emission-free automotive sector, which is highly favored and receiving great attention.
However, the phasing out of incentives related to electric cars and market instability will cause many companies to struggle. Gartner predicts that there will be industry consolidation, and by 2027, 15% of startups will either go bankrupt or be acquired.
