Inflation and materials are killing the dream of price parity – News – Hybrid and electric cars

The auto industry and the market in general are looking on the horizon for the day when price parity between combustion and diesel cars is officially announced. Electric cars. Many have been warning about this dream day for a long time, but reality seriously affects the achievement of the goal. A European study dashes hopes of reaching parity soon Revealing that the gap is not only narrowing, but widening more and more.

Clearly, Europe is not going through its best moment. The past two and a half years have been particularly difficult for the interests of the Old Continent. Poor foresight by the European Union and incorrect response to disputes have shaken the automotive industry with various problems Which jeopardize plans in the short and medium term. One of them is the expected price parity between thermal and electrical.

In a report prepared by AlixPartners, it is detailed that inflation and escalating raw material prices have opened the gap separating production costs. In 2020, the average material cost per electric vehicle was 2,152 euros, while last September the figure rose to 5,076 euros., more than doubled. Conversely, combustion vehicles, including hybrid cars, have also increased costs, but much less. From €1,475 on average in 2020, it went to €1,851 in September.

boss alixpartners I determined that study It does not include the cost increase for plug-in hybrid vehicles, although it is estimated that growth could be greater than that seen in pure electricity.. Numerous international complications obviously wreak havoc on balance sheets, but the fact is that in the quarterly results all the brands reported an increase in profits since the price of raw materials fell on the end consumer to see how the price of the product rose exponentially.

It must also be recognized that the same published report includes that during September the price of raw materials has been reduced since it reached its highest point during March to a maximum of 6,848 euros on average per car. However Winter and cold are approaching, energy costs are skyrocketing, and it doesn’t look like commodity prices are going to crash anytime soon. To this we must add inflation and component shortages, which in no way help the interests of the industry.

Despite the bad news, many warn that ICE and electrical products will soon reach expected price parity. Just a few days ago The head of Volvo said that the Swedish company estimates that electric and combustion cars will cost about the same by 2025.. On the other side of the pond, in the US, General Motors CEO Mary Barra thinks the same. Its electric machines haven’t made a profit for the company yet, but they estimate it will be in 2025.