EVs will become more affordable, according to automakers and the media, as battery costs decline and increased production yields economies of scale. These statements are probably true, and they will probably come true in time, but the COVID-19 pandemic, chip shortage, and skyrocketing gas prices have increased demand for EVs, which has led to the opposite – rising prices – at least temporarily.
However, Volvo CEO Jim Rowan predicts that by 2025, EVs will be priced similarly to their gasoline-powered relatives. Clearly, there are a lot of different factors at play. Rowan’s upbeat prediction might be wrong if the global financial crisis continues and petrol prices stay sky-high.
However, the CEO of a luxury automobile manufacturer who is “all in” on an EV future is prepared to claim that in two to three years, the price of electric cars and SUVs will be comparable to that of their ICE counterparts today. Rowan even went so far as to assert that businesses shouldn’t rely on government aid to succeed. They must figure out how to make EVs that consumers want and can afford.
As you can see from Rowan’s comments, he is noting the requirement for fewer batteries due to technological developments in order to achieve a sufficient driving range rather than discussing the decline in battery pricing as a whole. This makes perfect sense because an EV’s batteries are the most expensive component, but it doesn’t take into consideration the fact that automakers and dealers overcharge for electric vehicles.
The EX90, a three-row, seven-seat midsize electric SUV from Volvo that will take the place of the present XC90, was just formally unveiled. It hinted at a smaller electric crossover during the unveiling. Presently, Volvo sells the XC40 Recharge and C40 Recharge electric crossovers, and nearly all of its models are offered in a variety of PHEV (plug-in hybrid electric vehicle) combinations.
Rowan also made mention of a crossover in the “city vehicle” vein that Volvo would debut in 2023. Smaller EVs should also aid Volvo in increasing sales and lowering pricing. Most likely, the crossover Rowan was alluding to is the one Volvo hinted at with the EX90 at the most recent reveal event.
The current 2022 Volvo XC90 begins at a little over $50,000, but it can cost well over $70,000 if you load it up, giving you an indication of how much pricing need to go. In a fully outfitted form, the forthcoming EX90 will be less than $80,000.
The Biden Administration’s Inflation Reduction Act, which makes significant modifications to how the credit operates, may make the electric version eligible for a tax credit of up to $7,500, so keep that in mind as well. Rowan also mentioned that the future incentive will almost probably benefit the smaller SUVs.