EV Prices Are Trending in the Wrong Direction

EV Prices Are Trending in the Wrong Direction

The price of electric cars is climbing in China. Companies that make and sell EVs in the world’s biggest car market have raised prices across their electric lineups twice since February, as Bloomberg reports. Carmakers claim EV prices are going up because the cost of raw materials has suddenly increased. And the upward trend of these costs is just reflected in the higher price of EVs.

Sure. Why not? I understand the transitive property, which is pretty much just a syllogism dressed up in maths. But what I don’t understand is why so many of these carmakers claimed EV prices would go down in the near future, not up.

The idea carmakers sold prospective buyers and EV optimists was that when the technology matured, EVs would cost less. That like most technology or commodity, EVs would get cheaper as time went on. And that thanks to early adopters, the tech in flagship models would work its way into cheaper ones. Into commuter cars that sell en masse so people can, you know, actually commute.

EV Prices Are Trending in the Wrong DirectionPhoto: Getty

As carmakers in China keep hiking prices, commuters who were waiting for a cheaper EV must choose between adopting early or not at all. From Bloomberg:

Those who hesitated to make the leap earlier have paid for it, with one manufacturer after another raising prices. Indecision could be even more costly going forward.


But the point is these cars are unlikely to cost less down the road, considering automakers’ willingness to raise prices on a whim and with subsidies fast fading. Car buyers may be delaying any EV purchase at their peril.

These steadily increasing prices — though not surprising — are troublesome.

Remember, this is happening in China, which is not just the world’s biggest car market but also the world’s biggest EV market. If China can’t lower the price of electric cars via scale production and development because raw materials are scarce and therefore increasing in value, then what? At what point does the price of raw materials decrease if these are finite? Or, at what point does something — anything — offset the price of materials to make EVs cheaper?

Most importantly, will that something come soon enough for EVs to be more than a novelty? Meaning, will we buy enough EVs for the tech to “mature?”

Right now, Bloomberg analysts say EV prices must go down 25 per cent to boost adoption. While analysts with Morgan Stanley argue EV prices must go up by 15 per cent to keep pace with supplier costs. I guess the only way to really know is to buy ourselves out of the hole, regardless of the direction prices are trending.

EV Prices Are Trending in the Wrong DirectionPhoto: Getty