Boston Consulting Group’s Xavier Mosquet sees all the right things falling in place for battery-cars.

After several years of rapid growth, EV sales flattened out last year, raising concerns about the tens of billions of dollars automakers like Ford, General Motors and Volkswagen are spending on their electrification efforts.

A few years ago, Xavier Mosquet might have said that the industry was making a risky bet not likely to pay off anytime soon. But despite relatively slow sales, the head of the auto practice at the Boston Consulting Group has grown decidedly bullish on battery technology. A new BCG forecast sees the market share for electrified vehicles, ranging from hybrids to all-electric models, growing tenfold this decade, to 51 percent.

Perhaps more significantly, Mosquet sees key obstacles, such as EV range and price, rapidly fading away, meaning pure battery-electric vehicles could reach a “tipping point,” with prices reaching parity with gas-powered vehicles by as early as 2023.

“We thought we would reach a point where owning a battery car was a good economic payback for customers around 2025,” Mosquet told during a lengthy conversation. “But the decline has been much more aggressive than we thought and today, we think the tipping point is somewhere between 2022 and 2023. In industry terms, that is like tomorrow morning.”

Mosquet is less bullish about ride-sharing services than just two years ago, however.

(Exclusive: GM’s next-gen EVs could charge as fast as you can fill an empty gas tank.)

While there are plenty of challenges, including the lack of a national public charging infrastructure to rival the ever-present gas station network, batteries have been the biggest challenge to EV acceptance, according to Mosquet and other experts.

But most new battery-electric vehicles, or BEVs, are offering at least 200 miles per charge and 300 is quickly being targeted as the new norm. Tesla CEO Elon Musk this week suggested a 400-mile version of the Model S is coming, and Cadillac President Steve Carlisle has indicated that’s his brand’s goal, as well.

That leaves battery pricing as an even more important challenge because the longer the range of a BEV the larger the battery pack it will need.”

But even as range grows, the new BCG study has found that battery prices have been falling faster than most anyone anticipated, with pack level prices running an average of $190 per kilowatt-hour right now. (Mosquet explaining that pack prices typically run about 140% of battery cells alone.

“By 2030, we expect (pack prices) will be $126, with an aggressive case of $95,” Mosquet said. “And we think that our forecasts could come even earlier” if battery suppliers target costs as aggressively as they promise.

Tesla may soon offer a 400-mile Model S.

(Lincoln turns to Rivian for all-electric SUV.)

For a 300-mile range requiring around 100 kWh in batteries, the cost savings would be huge. At today’s average, a pack would run around $19,000. BCG’s mid-range estimate would bring that down to $12,600, with the aggressive figure dipping to just $9,500.

In its 2018 EV study, the Boston Consulting Group estimated about 48% of U.S. vehicles would use some form of electric propulsion, with an emphasis on mild, conventional and plug-in hybrids. The latest survey raises the figure to 51 percent.

That might not sound like much of a difference, but the details of the new study are telling. It sees the big change in terms of plug-based models, whether hybrid or all-electric, jumping from 14% to 24% by decade’s end. And, when you look even closer, the consultancy sees the biggest growth occurring in the pure-electric segment, largely because of added range and lower prices.

Buyers will have more choices, as well as lower prices and longer range, said Mosquet, Cadillac here teasing the all-electric SUV coming this year.

(Tesla’s Musk teases plans to deliver 400 mile range.)

One other finding could come as a big surprise to those who’ve been predicting a big shift away from personal vehicle ownership as ride-sharing services like Uber and Lyft gain traction. But the new study finds that costs for these services aren’t likely to come down as quickly as expected, even if driverless vehicles take over.

“The ambitious forecasts for shared cars (have been) based on the idea we would shed car ownership” in large numbers, said Mosquet. “We don’t see that happening, now that we have more data on the shelf. Someday, it could become cheaper than owning a car (but, right now), owning a car is cheaper except in a few places like Manhattan.”

And with EVs expected to become less and less expensive to own and operate, Mosquet says fewer motorists will be willing to give up the freedom and flexibility of having a car in the driveway and always at the ready.

(Exclusive: Genesis set to enter EV market. First model will be an SUV.)

Don't miss out!
Get Email Alerts
Receive the latest automotive news in your inbox!
Invalid email address
Send me emails
Give it a try. You can unsubscribe at any time.

Pin It on Pinterest

Share This