The cost of owning an electric vehicle (EV) could match petrol and diesel cars in the next five years.
That’s according to new research by Deloitte, which reveals consumer concerns over the upfront purchasing costs of EVs will gradually ease over time as technology improves.
A record two million EVs were sold globally last year and the price parity is expected to help boost demand further – the report forecasts four million EVs to hit the roads by 2020, 12 million by 2025 and 21 million by 2030.
Other factors forecast to accelerate the uptake of EVs are growing consumer demand for greener vehicles, coupled with government policies that offer financial incentives and inner-city restrictions for old, polluting cars.
Michael Woodward, UK Automotive Partner at Deloitte said: “In the UK, the cost of petrol and diesel vehicle ownership will converge with electric over the the next five years. Supported by existing government subsidies and technology advances, this tipping point could be reached as early as 2021. from this point, cost will no longer be a barrier to purchase and owning an EV will become a realistic, viable option for new buyers.”
However, the report projects supply will vastly outweigh consumer demand by around 14 million units over the next decade as manufacturers increase their capacity.
It suggests the gearing up of EV production is driving a wide “expectation gap” and both incumbent and new manufacturers will need to adapt towards the new competitive landscape.
Mr Woodward adds: “Those that can successfully build trust in their brand, ensure a positive customer experience from initial sale after through to aftercare and reflect consumer shifts towards the sharing economy in future business models will successfully navigate this. Equally, continual investment in engineering talent and the formation of partnerships with bespoke battery producers and third-party mechanic networks will also be important.”