Within three years, electric vehicles will be a cheaper option than petrol or diesel cars, according to new data.
Car manufacturers continue to wrestle with the rollout of new electric vehicles as governments increase pressure on the need for climate-friendly transport options to cut emissions.
As the pressure increases, so does the competition, which in turn has resulted in the price of EVs slowly getting cheaper.
Management consulting company Gartner predicted that the average price of an EV will drop making it the cheapest option for drivers by 2027.
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Experts are predicting that EVs will be the cheapest option for drivers by 2027
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However, as the cost decreases, the rise of more advanced EV technology could force repair costs up, with Gartner estimating that these will increase by 30 per cent.
As a result, vehicles that are involved in a collision may be more likely to be written off as the repair could cost more than the total value of the vehicle.
As the production rate of petrol and diesel cars falls, Gartner explained that the lower costs of EVs should not be done at the expense of higher repairs.
Pedro Pacheco, vice president of research at Gartner, said: “New [manufacturer] incumbents want to heavily redefine the status quo in automotive.
“They brought new innovations that simplify production costs such as centralized vehicle architecture or the introduction of gigacastings that help reduce manufacturing cost and assembly time, which legacy automakers had no choice to adopt to survive.”
By 2027, electric vehicle production costs are expected to drop considerably faster than battery costs as manufacturers develop new technology to boost their operations.
Equally, more expensive EV repairs may also lead to higher insurance premiums. In some cases, insurance providers could even refuse to cover particular car models.
Pacheco added that with the perceived promise of easy gains, many startups are still heavily dependent on external funding, leaving them particularly exposed to market challenges.
In addition, EV-related incentives are being progressively phased out in different countries, Pacheco warned, which makes the market more challenging.
Gartner predicts that by 2027, 15 per cent of new EV companies founded in the last decade will be acquired or bankrupt. But this does not mean the electric vehicle sector is crumbling, Pacheco stated.
He said this trend would encourage companies to make the best possible products and services to win over remaining consumers.
Electric cars will continue to make headways into the wider vehicle market in 2024 and will become more prominent as the Government makes it harder for manufacturers to not switch.
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Competition will result in the price of EVs slowly getting cheaper
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As of the end of February 2024, there were over one million fully electric cars on UK roads and a further 620,000 plug-in hybrids.