Cost Differential between EV and ICE — Path to cost parity by 2025

Karthee Madasamy
MFV Partners
Published in
2 min readDec 27, 2019

Electric Vehicles are still more expensive than ICE Vehicles — and that has been one of the hurdles to wider adoption beyond subsidy driven purchases or energy conscious purchases.

Great article in McKinsey about the cost differential today (2019) between base EV and a base ICE — it is about $12000 and it is a lot.

Cost Differential between Base EV and ICE in 2019

Cost Reduction, Shared Mobility fleet use cases, Battery Lease (how about Battery Swap?) and other innovative business models can drive down the price differential.

Cost Reduction efforts can reduce the gap by half!
Battery Lease as a way to drive down costs

By 2025, we may be able to reach a true cost parity between EV and ICE vehicles — and that is only 5 years away!

Cost Parity scenario in 2025

Source: McKinsey Insights — The future of mobility is at our doorstep, Dec 2019

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Karthee Madasamy
MFV Partners

Founder & Managing Partner @ MFV Partners, ex Managing Director @ Qualcomm Ventures, SF Bay Area, A’s / 49'ers / RedWings / Indian Cricket Fan