Electric vehicles (EVs) will become cheaper to make than their comparable internal combustion engine counterparts by 2027, analyst firm Gartner estimates, but it could lead to more expensive repairs and higher insurance premiums.
This is due to new, innovative manufacturing methods for EVs such as using gigacastings that build the vehicle floor pan in just two parts instead of 171 different ones, Gartner said in its Top Automotive Trends for 2024 report.
This reduces the time and cost of building vehicles dramatically, as it eliminates some 1600 welds.
Batteries are being used as structural elements in EVs as well, and a centralised architecture reduces wire harness complexity as fewer electronic control units (ECUs) are required. Car makers such as Mercedes-Benz and Geely-owned Volvo Group are introducing gigacastings. Gartner said Toyota is going a step further by setting up production lines that eliminate conveyor belts, with the cars moving by themselves along the assembly lines.
The above manufacturing process improvements will lead to production costs for EVs to drop much faster than initially expected, Gartner said.
Gartner researcher Pedro Pacheco said this is a consequence of new car makers wanting to heavily redefine the status quo in automotive production. This could spell trouble for established vehicle brands.
“They brought new innovations that simplify production costs such as centralised vehicle architecture or the introduction of gigacastings that help reduce manufacturing cost and assembly time, which legacy automakers had no choice to adopt to survive," Pacheco said.
Compared to BMW, Mercedes-Benz, and Volvo, relative newcomer Tesla has a much lower costs of goods sold per car at US$36,300 for the 2023 financial year, with the weighted competitor average being US$46,521. Chinese makers that are quick to adopt new technology, and which benefit from a massive home market and government incentives will add to the competitive pressure.
Battery prices are also on a downward trajectory and expected to almost halve by the end of this year. Giant Chinese battery makers Contemporary Amperex Technology Ltd (CATL) and Biyadi (BYD) which hold almost two two-thirds of the market look set to slash the cost for lithium-ion units substantially, which could bring in lower cost EVs.
Li-ion #batteries from CATL and BYD dropping as low as $56/kWh. 🔋
— Tony Seba (@tonyseba) January 20, 2024
"Currently, VDA-sized #LFPcells are selling for less than RMB 0.5/Wh [USD $69.53/kWh]. Leapmotor's vice president Cao Li recently said in an interview that the company's procurement cost for LFP cells has dropped… https://t.co/QasXsLvqtJ
Cheaper EVs that cost more to repair
In a swings-and-roundabouts way, the new manufacturing methods for EVs might lower retail prices, but at the expense of substantially higher repair costs and associated insurance premiums.
Gartner noted that the gigacasted floor pans may have to be replaced entirely in the case of vehicle crashes. Unlike traditional welded car floor pans, vehicles with gigacasted ones can't have be repaired by stretching their chassis back to the original shape, Gartner said.
Batteries that are part of vehicle structures can cause repair headaches as well. "... damage or malfunction in a cell can easily force the replacement of the entire battery, which is something that is also quite costly."
This in turn could have serious consequences such as lower vehicle desirability in terms of total cost of ownership, higher insurance premiums and even increased total write-offs as the repair costs exceed total residual value.
Slower EV growth ahead
Gartner estimates this year's market penetration for EVs will continue but slow down compared to 2023, as government incentives such as New Zealand's Clean Car Discount are being removed. In New Zealand, new EV registrations almost ground to a halt in January and February this year, the first two months without government subsidies.
This may lead to some EV startups going under, as they struggle to develop competitive vehicles, Gartner said.
Gartner calls this a new phase for EVs, but added there are still plenty of opportunities left in the market for car makers that endure.
79 Comments
More expensive to repair in the event of a crash. Much cheaper to repair in all other cases where repairs are needed. Also, expect modulizations to become far more the norm. Overall they're going to a lot cheaper to buy and own but - unless far, far more renewable electricity is generated - we're still in big trouble.
but - unless far, far more renewable electricity is generated - we're still in big trouble.
Fear not, the French have a solution: The electric car revolution in high gear
Musk must not have liked that.. "Hmm...this page doesn’t exist. Try searching for something else."
edit: nope..
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You have to be a Werner acolyte to see his posts. pass.
Transpower's connection queue already shows more than 30 GW of new renewable generation at various stages of the connection pipeline. For reference, we have around 9-10 GW of installed capacity at the moment. Analysis has shown that we need only 22 GW by 2050 to meet the demand from EVs (and process heat electrification). So indeed: fear not.
I was just watching a vid from ep technologies, they do big and small lithium marine systems, with solid state batteries you can drive a nail into them with zero issue, they are releasing 48v solid state batteries in the european spring... lithium will be archived in 2 to 3 years. Lithium is kinda like buying a steam powered car in 1893...
There's lots of different battery tech coming out. I'm not tracking them all but they won't go anywhere unless they can scale and compete with lithium on price, weight, longevity, and performance. In the meantime they will all talk big to get the investment funds required to try to scale.
Time will tell if any end up being adopted in cars. The price of Lithium has fallen a massive amount in the last year which makes it even harder for new tech to compete. I highly doubt lithium will be gone in the next 2 to 3 years.
Check out how many late model ICE vehicles are being written off for things you can barely see. I've seen a few at the damaged vehicle auctions where I'm mystified as to what the problem is.
Our ~$35K car was written off due to my wife rear-ending someone at such a low speed it didn't even spill her coffee in the cup holder or cause her bag to slide of the passenger seat. Bent up front bumper, cracked headlight, creased bonnet, holed radiator from the ute in front's towball...that's all it took. Minor scratch on the ute's bumper.
So add in higher insurance premiums to the cost of running them, along with now having to pay RUCs. In the UK some insurers have stopped insuring them.
https://www.insurancetimes.co.uk/news/john-lewis-issues-update-after-ev…
"Last month (26 October 2023), Confused.com said its data showed that drivers of EVs had seen costs rise by 72%, while the increase for motorists with internal combustion engines (ICE) was 29%."
https://www.autocar.co.uk/car-news/consumer/electric-car-insurance-cost
Autocar expands on this, 4500 quid PA for a model Y?? Insurance compulsory in UK.
And
https://electriccarguide.co.uk/tesla-electric-car-insurance/
I'm posting it on a 6 year old piece of technology I'll keep using till it breaks.
Is re-making a more efficient version of the same thing every 5-7 years better than using one item for 50?
I don't actually know, from an "emissions" view. From a world with finite resources though, it seems dubious.
I'm not just talking about cars and phones though.
We can recycle and reuse most things one thing that is both in limited supply and very difficult to access is oil, but we still burn billions of dollars worth of imported oil products each year and wounder why we have low productivity. We have next to no energy security, are entirely dependent on imported energy. When we could be developing our own batteries and improving renewable energy production.
We can recycle almost anything, but it's currently cheaper in most cases to just drag a new one out of the earth.
We use fossil fuels in many wasteful ways.
The Model T got 25mpg, over a century ago. In 2021, the average New car in America, gets...... 25mpg.
We have made engines exponentially cleaner and more efficient, but we've also mandated they get exponentially heavier and more resource hungry in their production.
Apple carplay and retractable door handles are cool though. And the instant torque.
We can't effectively recycle an EV battery. The most popular method is burning them. With the move away from cobalt there is no money to pay for the recycling. Pyrometallurgy produces 4x the weight of the battery as CO2. It's not easy easy faux green.
"The most common extant forms of battery recycling are pyrometallurgy (burning the batteries) and hydrometallurgy (shredding the batteries and soaking them in a liquid solution). Both capture only a limited set of the metals in the batteries and produce environmentally unpleasant byproducts of their own, including CO2 emissions."
"Most operations depend on selling recovered cobalt to stay in business, but batterymakers are trying to shift away from that relatively expensive metal. If that happens, recyclers could be left trying to sell piles of "dirt," says materials scientist Rebecca Ciez of Purdue University.
....Pyrometallurgy burns spent batteries into a slag, and hydrometallurgy dissolves them in acids. Both aim to extract cathode materials. The ideal is direct recycling, which would recover the cathode intact. But for recycling to be viable it must be cost competitive with mined materials."
https://www.science.org/content/article/millions-electric-cars-are-comi…
I drive a 62 year old ICE every day. Personally I hate cars that scream at me when I dont have my seatbelt on, or the handbrakes on an accidental click, or my doors not shut etc etc etc... not sure when the human race became that thick.
My personal favorite is when you lean on the middle rear seat and it beeps at you for not wearing a seatbelt. Im hoping for death before i am forced to own something like that.
Maybe not breaks down as much as reaches end of its economic life....
I think an EV will be like a slightly more expensive iPad - you get a great run out of them but they aren't designed to run forever.
Just another computing device - on wheels! The purchase price needs to reflect the economic life of the device.
Like an iPad, I wonder if you sell them second hand after a year and get a decent price, or just run them forever and sell them on TradeMe for $100 after many years of use. Will be interesting to see - nobody knows for sure yet.
I wouldn't bother with the diamond encrusted version - looking at you German manufacturers.
The opposite. Many sports car makers are abandoning EV in favour of continuing to make ICE vehicles. People apparently want the whole visceral experience, complete with engine noise and smell. At best they'll become more hybrid.
Sports cars aren't a sensible proposition, so normal vehicle as transport considerations don't apply.
You definitely don't want to buy a second hand BEV without having the ability to accurately check the condition of the high voltage batteries - and should also steer clear of brands with poor reviews. LeafSpy used to be the first app to download when considering a secondhand Nissan Leaf years ago. One would have to hope something similar - or better - is available for other brands.
Driver behaviour and charging can also negatively impact battery performance.
Can you give us a link to the BEV with batteries down to 62%?
Yea the Nissan Leafs have no battery cooling system built in, combined with the older chemistry used in the cell makes for a recipe of fast battery degradation. Newer vehicles using water cooling jackets and LFP cells are projected to last a million miles. Curious to see if that actually works out.
This is due to new, innovative manufacturing methods for EVs such as using gigacastings that build the vehicle floor pan in just two parts instead of 171 different ones, Gartner said in its Top Automotive Trends for 2024 report.
Gigacasting could equally be applied to IC vehicles. Actually there are far larger/more powerful presses but they aren't typically used in automotive applications.
Interesting that everyone got excited about 3D printing as a technology yet the one with the most profound impact has actually been better casting techniques.
Toyota's new Prius PHEV gets voted the "greenest car" on the planet due to being less resource-intensive & having a light battery pack. Before someone quotes that this is Toyota's "paid media", this is from a report from the American Council for an Energy Efficient Economy.
Amazingly, Tesla doesn't even show up on the list of EVs.
Toyota models made up half of the top 12 vehicles in terms of "green".
https://jalopnik.com/new-evs-still-can-t-beat-the-efficiency-of-a-plug-…
Have you seen the price of a Toyota PHEV and it still burns petrol. As of April it will also be paying a RUC as well. Lets not forget the National Party signed the Paris Climate Agreement in 2015, if we want to continue burning fossil fuel we will be paying a lot more then $3 a litre. For the last six years I have been driving a leaf it can still cover 100 km's at highway speeds more in and around Auckland for just $2 for every 100 km's. Saved enough in the last 6 years to by a Q plate BEV. My very old and now scraped corolla at best could manage 7.5l/100km. Easy to save money when you fuel costs are 1-10th. Even with the new RUC about bloody time, my fuel costs are 1/2 that of a petrol car.
If you want to be green walk or cycle, if you want save money and not keep burning OPEC oil, buy a used leaf for your daily commute. OPEC nations must be rubbing their hands together every time another anti BEV story drops.
That'd be the thousands of dollars I haven't paid for things like servicing or petrol over the lifetime that of the car? Or time not spent at petrol stations that aren't on my direct route to and from work?
Seriously, the only way to make a hybrid viable is to put as big a battery as possible into it, and that still resolve the inherent mechanical complexity compared to an EV, or the weight penalty for a battery plus an ICE engine to top it off when needed.
Even a car less than a year old could be written off if the bags have been deployed.
I discussed a 6 month old Commoodore with a panel beater a few years back that had been smacked into, deploying the side airbags. It was written off because of that deployment even though he had estimated it was economic to repair.
Production costs to drop at the expense of pricier repairs...
Really? So cheaper child labour on raw materials that make up the battery eh? I don't believe you.
Have you tried to replace a battery? Hyundai Kona battery is $35,000. Do you have that in your budget?
Petrol cars are running around 5l/100km for a 1500cc, pretty efficient in my eyes.
Yikes. Rapid reduction in the costs of new EVs over the next few years means that anyone buying now, or who has bought recently, will be stranded with huge losses on the second hand market within just three or four years. That is going to collapse the second hand market for EVs even faster.
Just look on trade me. Plenty of people selling replacement individual cells for prius and leaf. As required, the same will happen for the newer models.
We brought 50 lithium drill batteries from a recycler of a major brands warranty returns. 47 of them, ran OK after a charge. Another 5 had low capacity. So 40 out of 50 batteries returned under warranty, nothing wrong with them.as experience is gained I suspect both longevity and repairability will increase for car batteries.
Electric vehicles will become cheaper!
Whats your average retiree going to do next year, buy a $25k Yaris or a $25k Dolphin mini with zero fuel costs if you have solar?
The Dolphin mini can charge at home or the supermarket whilst you sleep or shop.
Or be a slave to international fuel cost and the ever increasing carbon tax.
...and you don't think that sanctions on China due to a Taiwan issue would effect ICE cars? Despite us having a semi-conductor shortage in recent memory that had that exact effect?
I find it weird how people want to transpose all these what-ifs onto a certain kind of car they don't care for but ignore the wide-ranging effects of those scenarios on literally everything else.
The first cars were often electric, the technology is about the same age.
Electric cars need to out compete ICE for the value of ICE to drop. We are probably another 5-10 years for that, for anything other than a short range passenger commuter.
Maybe it'll happen, when all the boomers whove been the largest adopters, can't drive any more.
The first cars were often electric, the technology is about the same age.
The idea is, the technology is nothing like the same, Its a bit like saying the Model T and <insert hypercar of choice> are basically the same thing... 4 wheels, a motor, burns petrol, goes places.
Depends on the ICE. Sold my last car of 20 years plus for $500 more than I bought it for, that's never going to happen with an EV. Also your EV is never ever going to be a collectable, I predict you will have to actually PAY to get rid of it if you are the last owner so they can attempt to recycle it or ship parts of it to somewhere they can.
Such a shame. These would be perfect in Akl. They'll get here eventually.
In Akl, for those that drive here often, you don't need 'fast' because traffic in Akl is awful. You don't need 'big' because being small and nimble means getting there faster. And you don't need flash unless you own an insurance company. (When we need bigger; about once or twice a year; we hire one from the local car rental firm which is cheap and has a good selection.)
https://www.stuff.co.nz/motoring/350206414/affordable-30k-ev-rumoured-a…
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