According to the latest report released by market research firm Gartner, it is estimated that the average production cost of pure electric vehicles in 2027 will be lower than that of internal combustion engine vehicles of the same level, but the average maintenance cost will increase by 30%.
The average production cost of BEVs in 2027 is lower than that of ICE vehicles of the same class
Gartner believes that 2024 will mark a new stage for electric vehicles. Pedro Pacheco, research vice president at Gartner, said:
New OEM manufacturers hope to revolutionize the automotive industry and will simplify production costs through various innovative methods, such as centralized automotive architecture, large-scale one-piece die castings, etc., to reduce manufacturing costs and assembly time. Traditional automakers have no choice but to follow suit and adopt these innovations in order to survive.
Gartner predicts that by 2027, the average production cost of next-generation battery electric vehicles (BEVs) will be lower than comparable internal combustion engines (ICEs). Pacheco said:
BEV production costs will fall much faster than battery costs in the coming years as OEM manufacturers disrupt product design and production operations.
This means that BEVs will achieve cost parity with internal combustion engines much faster than initially expected, but at the same time it will also make some maintenance costs for BEVs significantly higher.
New technology makes electric car maintenance more expensive
Gartner predicts that by 2027, the average cost of repairing serious accidents involving electric vehicle body and batteries will increase by 30%. Therefore, the cost of repairing a vehicle involved in a collision may exceed its residual value, so it is more likely to be scrapped and destroyed.
Likewise, more expensive collision repairs can lead to more expensive insurance premiums or even cause an insurance company to deny coverage for a specific vehicle model.
Gartner said rapid reductions in electric vehicle production costs should not come at the expense of higher maintenance costs, as this could cause a consumer backlash in the long term. New methods of producing electric vehicles must be deployed alongside processes that ensure low maintenance costs.
Electric vehicle startups reshuffle
Gartner predicts that by 2027, 15% of electric vehicle companies founded in the past decade will have been acquired or gone bankrupt. “This doesn’t mean the electric vehicle industry is collapsing. It’s just entering a new phase where the companies with the best products and services will win over the others,” Pacheco said.
