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Factors Driving the Reduction in Cost of Electric Vehicles



Over the past years, a growing trend towards sustainability has been observed and electrification is one of the fundamental elements of this movement. Incorporating electric vehicles into their fleet management has been the option for many organizations to achieve their sustainability goals. The good news is that EV price is seen to decrease as the cost of battery and electric vehicle charging continues to fall. A number of factors are driving these significant cost reductions.



One factor is the improvements made in battery technology. Ever since the batteries for EVs were introduced, manufacturers have been innovating and have made great advances in battery chemistries. For instance, the shift from the use of cathodes that are highly dependent on cobalt into the use of nickel-based batteries has driven the cost reduction. This is because cobalt is more expensive than nickel which offer higher energy density and longer life cycle. Such change also makes the electric vehicle charging costs to go down.



Another factor that promotes the lower price tag for EVs is the industrial policies that provide support for battery development. Most governments around the world have recognized the big role of EV technology in enabling the transition from the consumption of domestic energies into renewables. This results in increasing policy support for the creation of EV batteries that capacitated more manufacturers, thus contributing to decreased costs.



Lastly, the increasing production capacity for EV batteries is also rising at a gradual rate while transitioning into huge plants. This also reduces the cost per unit of the battery. Sizes of plants have expanded and their capacities have more than doubled with the industry experts expecting even more in the coming years. They equate it to the conclusion that there would be sufficient batteries for up to 37 million pure EV every year. So, electric vehicle charging is also seen to increase its share in energy consumption.

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