Will the dizzying drop in the cost of batteries “kill” thermal cars ?

© Ionity

This is rather good news for those who are tempted by the switch to electric – and probably less so for sales of thermal alternatives. Because from month to month, the price of batteries for electric cars tends to drop dramatically. A fact observed in a particularly notable way in China, while stocks of batteries and supplies necessary for the manufacture of the element began to accumulate.

This is helping domestic sales, but not only. However, there is reason to be rather optimistic, because everything indicates that the reduction in production costs will continue. A Gartner report thus suggests that by 2027, the price of batteries – combined with more efficient manufacturing methods – should result in production costs for electric cars lower than those for thermal and hybrid cars.

The fall in the price of lithium goes hand in hand with an increase in stocks

© Unsplash/Possessed Photography

A horizon closer than the most optimistic estimates so far. And some of which have contributed to defining the 2035 deadline, beyond which sales of new cars based on fossil fuels will be banned in Europe. In detail, the price of Chinese lithium carbonate has fallen from 600,000 Yen Renmbi per tonne (around 30,385 euros) in August 2022 to less than 100,000 Yen (75,500 RMB, or around 9,600 euros) two years later.

As a result, several specialist sites including Trading Economics believe that the market could achieve growth of around 50%. All this with new customs rules in the United States and Europe to promote local battery production – which should help to bring prices down.

And this has already started with announcements of Tesla price cuts in China, and the launch of more vehicles with a sale price of around 20,000 euros. Such as the Citroën ë-C3 or the new Grande Panda on the Fiat side – not to mention the new generation Renault R5 which is also coming in a variant around this price.

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Beyond all these consequences, this significant price drop should encourage the generalization of new types of more efficient batteries. For example, we are expecting the arrival of vehicles equipped with solid-state batteries – without liquid electrolyte. This would make the element safer, thus not exposing any reactive material to the air.

The battery of a Citroën ë-C3 © Citroën

But also of store more energy by relying directly on metallic lithium, which can store many more electrons in the same volume. Or even reduce the charging time to a few minutes .

So, should we wait before buying ?

This is the question that we can ask ourselves in light of this new data. In fact, the purchase and use of electric cars are improving rapidly. And the sale prices remain largely subsidized, particularly in France. Postponing the purchase decision clearly amounts to running the risk of losing these financial advantages, which remain substantial – but tend to reduce from year to year.

Overall, the drop in the price of electric vehicles is likely to continue. All this in a market that is reaching a certain maturity. If we are moving towards ever cheaper models, we must therefore remain pragmatic. If you need to change your car and you opt for an electric car in 2024, there is every chance that you will be satisfied with your purchase.

You will benefit from aid that is still quite substantial in France, which tends to reduce each year. Less expensive, the next generation that arrives on the market should also be much less or even not subsidized by the public authorities.

• The price of the raw material at the heart of electric cars has been falling for two years.
• A fact favored by the increase in extraction capacities, but also a slight supply shock, particularly in China.
• Enough to support the fall in the production price of electric vehicles which could become lower than those of thermal cars by 2027.

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