In barely four years, the production costs of an electric car will be the same as those of a one with a combustion engine.

This is predicted by the Swiss investment bank UBS, since the battery packs for electric cars, the most important cost item, can be produced more and more cheaply.

UBS compared the price per kilowatt hour (kWh), an important measure of the cost of the battery pack and thus the electric car, of the seven largest producers of battery cells and battery packs.

This includes companies such as the Japanese Panasonic, LG Chem from South Korea and the Chinese Contemporary Amperex Technology (CATL).

In the automotive industry, an average price of around $ 100 per kWh ($ 84.4) is seen as the magic number at which the production cost of an electric car comes close to that of a fuel model.

This will be achieved in 2022, according to UBS, bringing the difference in production costs below $ 2,000.

Two years later, this difference will have disappeared, UBS expects.

"There won't be many reasons to go for a combustion engine after 2025," UBS analyst Tim Bush told

The Guardian

last week

.

The bank expects electric cars to have a 17 percent share of sales worldwide that year.

In 2030 this will have risen to 40 percent.

In 2024, the production costs of an electric car will be the same as that of a fuel model.

(Photo: Audi)

Tesla strives to more than halve costs per kWh

The costs per kWh have been falling sharply for a number of years in a row.

According to research by Bloomberg New Energy Finance, the average price per kWh was still at $ 288 in 2016, while it was $ 158 last year.

In view of the above, manufacturers are keen to reduce the price even further.

This can be done by reducing or even completely eliminating the use of cobalt.

The Chinese CATL is already doing this and has reportedly reached a level of $ 80 per kWh.

Based on

Bloomberg

estimates, Tesla is

slightly above that with around $ 114 per kWh.

The changes to the chemical composition of the battery cells and the improvements in the production process announced by Tesla in September should push the price per kWh even further.

The American manufacturer expects to be able to realize a price decrease of 56 percent from the current level, which will probably bring the price per kWh below 60 dollars.

What also helps is that the production process of battery cells, battery packs and electric cars themselves is much less labor-intensive compared to the construction of fuel cars.