In 10 Years, How Much Should An Electric Car Cost? Sec Chu Says $25K

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Dr. Steven Chu, U.S. Secretary of Energy

Dr. Steven Chu, U.S. Secretary of Energy

Electric cars have traditionally been more costly to build and buy than their gasoline counterparts thanks to their limited production numbers and the high cost of battery packs. 

We already know that the price of electric car battery packs are dropping faster than analysts predicted they would, but how long before electric cars become more affordable

According to U.S. Secretary of Energy Dr. Steven Chu, affordable electric cars are around a decade away. 

Speaking at an event in Dearborn last week, Chu said that he expected U.S. automakers and suppliers to be testing electric cars by 2020 that cost significantly less to manufacture than today’s production electric cars. 

Three years after that, he predicts, they will go on sale for prices of less than $25,000. 

Of course, we're already seeing cars in Europe reach this kind of price point: The 2013 Renault Zoe, for example, is predicted to cost less than $25,000 when it launches later this year. However, the purchase price doesn't include the price of the battery pack, which must be leased separately. 

Chu, on the other hand, is talking about a car that costs $25,000 to buy, inclusive of battery costs.

Renault ZOE electric car live photos

Renault ZOE electric car live photos

Enlarge Photo

“Realistically, we think a plug-in hybrid --30, 40 miles, 50 miles -- or a car at maybe double the range can satisfy a lot of needs,” Chu explained. “And there, we think the price point at $25,000 is a very real price that we can maybe achieve in a decade.”

Today, $25,000 will buy you a lot of car for your money, including the fuel-sipping 2012 Toyota Prius C. 

But in ten years, even at modest inflation rates, a $25,000 car could be the equivalent of a $23,000 car today. 

In other words, it’s possible we’ll see electric cars in ten years’ time with prices that compete with entry and mid-priced gasoline cars. 

Would you buy an electric car if it was priced at $23,000? What other things would you need to seal the deal?

Let us know in the comments below. 


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Comments (9)
  1. I think Mr.Chu actually suggested cars with double the range of the Leaf (that would be ~140 EPA rated miles) at $25K. A car like that would need ~40KWH batterypack, so I guess battery cost needs to drop below $200/KWH to make the $25K price possible. Since battery cost is already supposed to drop to~250/KWH by 2015 that doesn't sound too ambitious.

    I think Nissan will have a 140 mile version of the Leaf on the market by 2015 at ~$35K and I expect Tesla to have it's smaller sedan ready by 2015 with the same range at ~$45K.

    So, yes I think $25K/140 mile EVs are possible in less than a decade and yes choosing it over an ICE offering would be a no brainer for me.

  2. i am still sticking to my 10-year prediction. i think by then it will be a no-brainer for most people.

    just how many people are gonna be willing to shell new bucks for a gas car 10 years from now, knowing full well its resale value will plummet ?

    used gas cars will still be around for a long time.

  3. Chu must be out of touch if he thinks it will take 10 years to develop a practical, long lasting, affordable battery that will make the current crop appear to have come from the Stone Age. But then, Chu thought Solyndra was a good idea. Manufacturing costs have already hit rock bottom it would seem, judging by the immense volumes being produced (laptops). And a 140 mile EV is not my idea of an EV poised to supplant what we already have.
    There are also costs beyond the simple initial purchase price, which in EVs has always meant battery replacement costs. Ironically, the more EVs are on the road, the lower the price of gas and the reduction of any price advantage of EV energy costs.

  4. @Kent: As I'm sure you're aware, with the exception of Tesla, no carmaker is willing to use commodity Li-ion cells of the kind used in laptops.

    Costs for large automotive-scale Li-ion cells will likely follow a similar cost reduction curve, but the prices of the 2 cell types are far from equal--due to differences in their development stage, manufacturing technologies, and order volume.

    As for gas prices, the decline in U.S. demand began in 2007 and will continue unabated. But the U.S. demand is only a minor factor in global oil price variation; the effects of global economy, developing country growth and, most of all, Chinese energy demand, far outweigh whatever happens in the U.S.

  5. A123's new lithium-ion is rated for 2,000 cycles. In a 100 mile range EV that's a 200,000 mile battery.

    I'd call that long lasting.

    140 mile range with 90% recharging in

  6. I'd buy a $25k EV if I lived closer to town.

    Consider a $25k EV vs. a $20k 40mpg gasmobile.

    Purchase both for nothing down, 4% for 5 years. Drive 12,000 per year.

    For the first year the EV would cost you about $25 more per month. That number would drop over the first five years. At the end of the five year period, when the loans were paid the EV would save you over $100 per month and that savings would rise as with the cost of gasoline.

    EVs are really close to making great financial sense.

  7. one also needs to include maintenance, smog checks here in california.

    as you pointed out, there will come a time when the price difference is such that people will start opting for evs.

    range is really a non-issue, by far and large. given today's range, if an ev cost the same as an ice, the ice would already be a dinosaur.

    new ices will be made in any sort of volume up until the price difference becomes too small.

    10 years is a long time for the ev to improve. after that point, i simply dont see many people spending new car dollars on ice technology.

  8. I would be a nice EV for $25k as my commuter car. But I would still get a large SUV for occasion use with family to the mountains. But I would hope my next SUV would have a powertrain based on something similar to the Chevy Volt.

  9. Before you go overboard recommending the Prius C, we had 3 'incidents' before 800 miles on the vehicle.

    The last 2 incidents involved - NO BRAKES!

    Toyota refuses to acknowledge software problems - as they did after killing 89 people with sudden acceleration. How many will die in the Prius C before their shoddy software is corrected?

    This isn't a car worth dying for.

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