Report: EVs more expensive until 2030

According to a new report - and in contrast to many other forecasts which suggest that the TCO (total cost of ownership) of EVs will meet or be less than that of conventional cars before the end of this decade - electric cars will not be able to compete with conventional cars on price until 2030.

The government's climate advisers wants to see 11m electric or plug-in hybrid models on UK roads by 2030, to meet the UK's carbon targets.

The total cost of ownership of environmentally friendly electric vehicles is currently around £5,000 more than petrol and diesel cars, found the study undertaken by consultancy Element Energy and commissioned by the public-private LCVP (Low Carbon Vehicle Partnership).

But even if fuel prices double to £3 a litre, the authors said, the overall cost of electric cars will be higher than conventional combustion engine cars. Electric cars today cost around £30,000 without a government grant of £5,000 - nearly double the equivalent petrol and diesel rivals. But they are cheaper to run, with a Nissan Leaf costing around 2p per mile, compared to 14p for a Ford Focus. 

The Daily Telegraph quotes Greg Archer, managing director of the LCVP, who said falling battery costs would help electric cars compete in the next 15-20 years. "After 2020 the range of new technology will be more commercially available. It's obvious that there needs to be a reduction in the price of batteries and fuel cells to achieve market share and become competitive. It remains to be seen if [cost] reductions will be achieved, but these [the projections in the report] are not conservative estimates, they are the best estimates based on probability."

He added there was a very small chance that electric cars and other alternatively fuelled vehicles would become competitive by 2020, but said that was around a one in 20 likelihood. "Major technology takes a couple of decades before it receives parity with current technology," said Archer.

The LCVP report suggests electric and plug-in hybrid cars produce lower carbon emissions over their lifetime compared to petrol and diesel cars, provided they are powered with renewable electricity. But Archer said it was unlikely such cars would make a large contribution to government carbon targets. "The majority of carbon savings in transport will come through the improvement of conventional cars and the switch to biofuel," he said.

As I have said many times in this blog, these reports should be taken with a pinch of salt, not least because we have yet to see a forecast proved correct for the EV market.