Volvo says EVs will be as cheap as petrol cars by 2025
Cheaper batteries set to drive down cost of electric vehicles, says Volvo bossVolvo has declared that it expects battery-electric vehicles will be as cheap as conventional petrol or diesel-powered cars by 2025, thanks to breakthroughs in battery technology.
According to Volvo Cars chief executive Jim Rowan, the Chinese-owned Swedish car-maker is confident in the price parity prediction because of new technology that will significantly slash the cost of batteries used to power EVs.
“We think we get [to price parity] … around 2025, where there’ll be enough technology that’s driving down cost on the battery,” Rowan told Automotive News.
“Technology will drive range up. Less batteries, but more range, at less cost – we’ll get there.”
In response to more affordable batteries, Rowan confirmed Volvo would introduce a new small SUV that will sit below the current Volvo XC40 and C40 EVs and is set to be its most affordable electric car yet.
Aimed at younger buyers, Rowan says it will offer the new SUV – which could be called EX30 and was teased at the unveiling of the new Volvo EX90 last week – on a subscription basis.
Despite his optimism, the cost of raw materials have skyrocketed over the past two years in response to soaring demand.
However, prices of batteries have dropped more than 80 per cent over the past 12 years.
Currently, EV prices on average have risen by around 26 per cent in 2022 and are tipped to continue to get more expensive in 2023.
Some pundits suggest Volvo’s bold prediction will be easier to achieve with premium brands, where an EV will be compared with a more powerful petrol or diesel engine.
Working with Volvo to slash costs is Chinese battery supplier CATL, which has already introduced its next-gen lithium-iron phosphate power pack in the Tesla Model 3 that’s said to provide $US131 ($A195) per kilowatt.
Volvo, meanwhile, says it will achieve $US100 ($A149) per kilowatt from 2025.
In Australia, Volvo recently announced that it will only sell electric cars from 2026.
Related: Pint-size Volvo EX30 electric SUV teased
Related: Volvo EX90 revealed and confirmed for Oz in late 2024
Related: Volvo Australia to go all-EV by 2026
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