EV Price Parity: When and How 200-mile Range EVs Can <em>Really</em> Win on Economics

The best-selling passenger car in the U.S. is the Toyota Camry. In base form, its price is just $23,000. Our study takes this benchmark, and analyzes if, when, and how electric vehicles (EVs) can beat that leader on price. Specifically, we analyze how EVs capable of driving 200 miles or more on a single charge will evolve in price and capability, taking the Tesla Model 3’s eventual successors as our case study. We consider the effect of three key disruptive innovations that will benefit EVs over the next two decades: Falling battery prices, carsharing business models, and vehicle-to-grid functionality. We find that even by 2035, falling battery prices alone may not be fully sufficient to allow EVs to undercut vehicles like the Toyota Camry – although the race is close. However, adding in carsharing and vehicle-to-grid (V2G) business models could allow EVs to effectively win on raw value proposition by 2030. That would deal a potentially deadly blow to the prospects of cars powered by the internal combustion engine (ICE), sooner than some incumbents anticipate.