Why Are Electric Cars So Expensive? And When to Expect Prices to Fall.

Why Are Electric Cars So Expensive? And When to Expect Prices to Fall.

You’ve probably seen more electric cars on the road lately, but if you’ve seen the price tag for them, then you might be inclined to wonder why they’re so expensive. What makes electric vehicles cost so much more than gas-powered cars?

Electric vehicles are expensive because they are a novelty item that is difficult to manufacture. The batteries, specifically, that power the electric vehicle are expensive to produce, which reflects in the overall price of the product.

There are a lot of reasons that electric vehicles are so expensive for most consumers, but are they worth the price point or are manufacturers just overcharging for their products? Let’s dive into the details of why electric vehicles are so expensive and whether they’re worth the price tag.

Electric Cars Are a Novelty Product

One major reason that electric vehicles are so expensive when compared to gas-powered vehicles is that the technology is relatively new. While the first electric vehicle was produced in the mid 1990s, the idea has taken a long time to take root in the culture.

The early 1990s saw a number of electric car prototypes released by various manufacturers. However, the GM EV1 was by far the most iconic model of the bunch. Thanks to its cutting-edge design and advanced technology, the EV1 quickly became a symbol of the possibilities of electric cars.

With climate change becoming a more pressing issue on the mind of many Americans and the ever-present demand to reduce dependence on fossil fuels, electric cars are starting to become more appealing.

Even so, electric cars aren’t as easily mass-produced as other gas-powered cars that have already been on the market for years. EVs use a completely different power source, software, and have a lot of technical and engineering challenges to overcome to function properly.

As such, despite the growing interest in electric vehicles, they remain something of a novelty, a feature which is expressed in the higher prices of cars like the Audi e-tron, Tesla Model S, or the Nissan LEAF.

Over time, it can be expected that these prices will drop somewhat as manufacturing becomes more efficient and a growing consumer market increases the demand for new products.

Electric Cars Are Expensive to Manufacture

Quite simply, electric vehicles are no cakewalk to make. They require an extremely powerful battery to power the vehicle instead of an engine, and numerous safeguards must be put in place to ensure that there is no risk of electrical shock or combustion of internal components in the system.

Battery

One of the most expensive components of an electric vehicle is undoubtedly the battery, which are made from rechargeable lithium-ion batteries.

These aren’t cheap to source, and the quantity needed to provide power to the vehicle is numerous, making EV batteries one of the most expensive components that is reflected in the purchase price.

Fewer Manufacturers

Because there are fewer manufacturers of electric vehicles, they are capable of setting the standard for pricing rather than being bound by a range of competitors that would be competitively driving prices down to vie for consumers’ attention.

Once more companies start seeing the merit in EVs, we can expect the prices to drop somewhat as companies compete to secure brand loyalty for their cars.

Are Electric Cars Worth the Price?

Electric cars, for the most part, are definitely worth their purchase price if you can swing it. Built for endurance and very luxurious, EVs are competitive with some top-of-the-line gas powered cars on the market.

As cars continue to improve their array of features, EVs will likely continue to grow in popularity as more people recognize their merit as a worthwhile investment.

Owning an electric vehicle comes with its own maintenance problems, but it can certainly be said that EVs are worth the price.

Higher-Quality Build

Compared to most cars you’ll see out on the road, electric vehicles are built with higher quality parts and require less servicing than most other vehicles.

Most EVs also built with a low center of gravity and a reinforced frame, earning them top marks from the National Highway Transportation Safety Administration and the Insurance Institute of Highway Safety.

Zero Emissions

Another great reason to switch to electric vehicles if it’s in your budget is that they have almost zero emissions, certainly nothing coming from the tailpipe.

Residual carbon buildup from the electricity is the only pollutant you’ll find in an electric vehicle, making them a lot more environmentally friendly than any gas-powered car, especially gas guzzlers.

When Will Electric Car Prices Go Down?

Well, that all depends on the market demand. Generally speaking, electric car prices go down when demand is high and there are more options available. However according to E Source, EV battery prices currently average around $147 per kWh. But it’s estimated by 2023, prices could fall to $102 kWh, and potentially as low as $80 kWh by 2030.

E Source’s projected pricing for EV batteries.

As battery prices start to go down, EV car prices will likely follow suit. This could make EVs more affordable for a wider range of consumers, which could in turn increase demand and drive down prices even further.

Final Thoughts

As a whole, electric vehicles are very expensive compared to most gas-powered cars, but there’s a good reason. Electric vehicles are closer to luxury vehicles with their high-quality build and unique electric motor that produces no emissions. The lack of mass production for electric vehicles also contributes to their scarcity and thus increases their value to consumers.

In the long run, as more car manufacturers start seeing the global interest and merit in electric vehicles, it’s quite likely that we’ll see the high price tag on electric vehicles drop somewhat as different companies try to capitalize on the new market.

Last Updated on August 8, 2022

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