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

September 30, 2016 | State of the Market Report

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.

Coverage Areas

  • Owning the Energy Transition
  • The Future of Mobility

Table of Contents

  • Landscape
    The Toyota Camry is a hard incumbent to beat – its base price is just $23,000, and it is the U.S.’s best-selling passenger car – but electric vehicles are getting cheaper by the year
  • Analysis
    Together, carsharing and vehicle-to-grid functionality have the potential to make EVs the most economically-sensible option by 2030.

Lead Analyst

Cosmin Laslau, Ph.D.
Director, Research Products