Prices are falling for batteries, consumers are turning away from diesel engines after Volkswagen’s emissions scandal, and governments in Europe and China are enforcing tougher emissions rules.
As more electric cars roll off assembly lines, the trick will be getting more people to buy them.
A key factor will be price — of the battery to the manufacturer, and consequently of the car to the customer.
Tesla said last week it will close many of its stores and move to online sales only so it can cut costs and reach its goal of selling the Model 3 for $35,000. Before the announcement the lowest price was $42,900.
The estimate for 2018 battery pack prices is below $130 per kilowatt hour for the most efficient manufacturers. That is down from $1,000 per kilowatt hour in 2010, and closing in on the $120 per kwh level that the International Energy Agency estimates will make a compact battery car cheaper to own and operate than its internal combustion cousins at Europe’s high gasoline prices.