√Price parity between petrol and electric cars years away

Rising electric-car battery production costs have ensured petrol-powered vehicles remain significantly more affordable to buy than plug-in alternatives, according to one high ranking automotive industry executive.

The CEO of French car-maker Renault claims the price gap between petrol and electric vehicles may not reach parity until next decade due to the rising cost of the precious minerals that go into battery packs.

In an interview with Automotive News Europe at last week’s Paris motor show, the global boss of Renault, Luca de Meo, said: “I do not see this parity getting close.”

As reported by Drive last week, the new BMW iX1 electric SUV is $17,000 more than the flagship petrol-powered X1 – an increase of about 26 per cent.

Likewise, the Genesis Electrified GV70 incurs a $45,000 premium compared to the previous most-expensive petrol-powered version of the mid-size SUV – a 55 per cent price increase.

According to Mr de Meo, in 2014 the automotive industry had expected the per kilowatt-hour cost of an electric-car battery to be approximately $US100 by 2019.

A report by news agency Reuters found the average per kilowatt-hour cost of a battery was close to $US115 in April 2022, and is expected to rise to about $US120 by 2023.

Research conducted by US financial consulting firm AlixPartners found the price of raw materials such as lithium, nickel, manganese and cobalt increased by more than 140 per cent between March 2020 and June 2022.

According to Mr de Meo, the cost of raw materials accounts for 80 per cent of an electric-car battery’s overall price.

“(Renault) can come up with better battery chemistry and better power electronics, but these gains would be erased when the price of cobalt doubles in just six months,” Mr de Meo told Automotive News Europe.

“From an environmental point of view, having vehicles with batteries of 150kWh to 200kWh is simply environmental nonsense.”

Renault has previously announced it is aiming for 100 per cent of its new-car sales in Europe to come from electric models by 2030 – five years before the European Union’s proposed ban on petrol and diesel cars.

While Renault is reportedly still aiming this target, Mr de Meo says it will be customers – not car companies – who decide when petrol cars will die.

“I am taking the company there, but ultimately it will be the market, the customers, who will decide if they want to be electric-only,” de Meo said.

Renault was one of the first car-makers to mass-produce an electric vehicle, the Zoe.

Despite its early adoption of electric cars, the company’s Australian model line-up currently consists of just one zero-emissions model, the Renault Kangoo Z.E.

Renault is planning to expand its electric-car line-up overseas with passenger cars – such as the Megane E-Tech and reborn Renault 5 – and commercial vehicles including the Master and Trafic.

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