Electric car prices fall below petrol and diesel as battery costs continue to fall
Battery packs could fall to around £45 in the coming months
The cost of electric vehicles (EVs) is becoming cheaper as the price of batteries falls and manufacturers offer discounts.
Dr Andy Palmer, Chairman of Electric Vehicles UK said that price parity was "only a dream" when he helped develop the pioneering Nissan Leaf.
At the time, batteries cost $1,000 (£742) per kilowatt hour, while now they cost around $60 (£44.56) per kilowatt hour.
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Battery packs could fall to around £45 in the coming months, as Chinese brands are also making progress to bring the costs down.
The monthly gap between petrol and diesel cars and EVs has dropped £32.
Drivers who favour traditional combustible engines have fewer and fewer reasons to stick around with unleaded and diesel ahead of the 2030 ban from the Labour Party government.
Speaking out over the price of EVs and the trend in England, Pat Hoy, founder of Insider Car Deals said: “RRP is meaningless, no one actually pays it.
"Our transaction price data shows the real story: the median discount on petrol and diesel cars is already over 10% (£4,134), and on EVs it’s nearly 12% (£5,840).
“On PCP, the monthly gap between ICE and EVs has narrowed to just £32, and when you look at total cost of a PCP - including the balloon payment - ICE models still end up around 5% (£2,391) above RRP, while EVs come in almost 5% (£2,960) below.”
Steve Fowler, Founder of Carblah, says PCP fees are now £55 a month less than 12 months ago.
He explained: “Recommended retail prices are yesterday’s news. What matters most to car buyers is what they pay each month and when it comes to finance deals, EVs have more incentives and lower rate finance making them more affordable than ever.
“The Independent EV Price Index has shown that PCP costs for a typical electric car have dropped by £55 a month or 10.8% compared with a year ago, while the average APR charged on an EV PCP finance deal is 3.5% versus 6.6% for a petrol or diesel model.”
One motorist replied to the figures and said: "£32 a month is a significant difference but what about the depreciation which is an even bigger difference. No way will my petrol car be going anywhere."
JATO Dynamics analyst Felipe Munoz previously said that the shift in prices was due to tougher regulatory and technological requirements and the falling cost of key EV components such as.
He noted: “The narrowing of the BEV-ICE price gap cannot only be attributed to the availability of cheaper BEVs on the market. Although carmakers’ electric offerings are improving in terms of both quality and affordability, ICE cars have risen in price overall.
“This is a result of factors such as increased regulation, stricter standards and the introduction of more high-tech features, all of which have combined to hike the final retail price of these vehicles.
"In the meantime, electric cars have benefitted from lower battery costs, which has caused BEV prices to decline.”