EVs set to be more affordable than conventional cars by 2022

According to a new report by Bloomberg New Energy Finance (BNEF), electric vehicles (EVs) will be cheaper to buy than conventional cars by 2022.

The report predicts that the declining cost of batteries could help kickstart a large-scale roll out of EVs and is vital to cut carbon emissions and air pollution. Nonetheless, it highlights that EVs currently remain more expensive, with just one per cent of new cars sold being electric.

The BNEF study estimates that the total cost of ownership, combining purchase price and running costs, will be significantly lower than vehicles with internal combustion engines. The report also predicts that 35 per cent of global new car sales will be EVs in 2040.

Salim Morsy, senior analyst at BNEF, said: "In the next few years, the cost-of-ownership advantage will continue to lie with conventional cars, and we therefore don't expect EVs to exceed five per cent of sales in most markets - except where subsidies make up the difference. However, that cost comparison is set to change radically in the 2020s."

Colin McKerracher, lead analyst at BNEF, added: "At the core of this forecast is the work we have done on EV battery prices. Lithium-ion battery costs have already dropped by 65 per cent since 2010, reaching $350 (£250) per kWh in 2015. We expect EV battery costs to be well below $120 (£93) per kWh by 2030, and to fall further after that as new chemistries come in."

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