In the early days, only millionaires could afford automobiles, and they were often scorned as “toys for the rich.” Henry Ford revolutionized this by creating an economy of scale, making cars accessible to the broader population. The same transformation must—and will—occur with electric vehicles (EVs). It’s simply the natural progression of the economy.
The harsh truth is that EVs are expensive—prohibitively so for many. The additional premium required to “help save the planet,” as the popular narrative goes, is simply beyond what some of us are willing or able to pay.
Because the wave of electrification correlates with other global political trends, the writing is on the wall: EVs are going to be your next car, sooner or later.
That said, the necessity of paying a premium for an EV over a conventional ICE vehicle is not set in stone, at least in principle. Currently, EVs in the US are approximately 15% more expensive than their traditional ICE counterparts (see here). Although modern EVs represent a relatively new technology still advancing through early industrialization stages, it’s important to note that they require about 30% fewer parts. Ideally, this component reduction could lead to a corresponding decrease in price as the technology matures and production scales up.
In other words, as battery technology improves, production scales up, and market adoption increases, it’s reasonable to anticipate that, in the long run, EVs could become 30% more affordable. Thus, transitioning from ICE to EVs is fundamentally deflationary, which is good as our economies struggle with stubborn inflationary tendencies.
Some industry experts assert that EVs will never be “cheap.” However, I respectfully disagree with this assumption. Such a stance seems to contradict the fundamental principles of the capitalist economy, which tend to drive down costs through innovation, competition, and economies of scale.
EVs must become affordable. And they will. It’s not a question of “if” but “when.”
I am a project manager (Project Manager Professional, PMP), a Project Coach, a management consultant, and a book author. I have worked in the software industry since 1992 and as a manager consultant since 1998. Please visit my United Mentors home page for more details. Contact me on LinkedIn for direct feedback on my articles.