Why Are Electric Cars So Expensive? The Factors That Determine The Cost Of EVs

Why Are Electric Cars So Expensive The Factors That Determine The Cost Of EVs

Electric vehicles can be a bit pricier than regular gas-powered cars. If we ask the common person why this is the case, they might say that it’s because electric vehicles are a newer technology, and thus the parts are more expensive. However, this is only partially true.

To understand why electric cars are so expensive, we’ll need to delve deeper and see the bigger picture. This article will look at some of the reasons and how those factors impact the overall price of EVs. 

 

Why Are Electric Vehicles So Expensive?

To understand the price difference between EVs and regular cars, we must first understand the basic working principle of the former. When it comes to how it works, EVs are much simpler than their conventional counterparts. The absence of an internal combustion engine and many other mechanical parts eliminates the complexity factors in a Battery Electric Car (BEV).

The points outlined below will give a clear picture of why EVs are expensive:

The Heart of the EV: The Battery

Electric cars are powered by batteries, which cost a lot to produce. A battery is made up of many cells that store electrical energy in the form of chemical energy. The cost of these cells has decreased considerably over the years, but they are still the most expensive component in an EV. 

The Charging Infrastructure

Another reason why electric cars are expensive is the lack of proper charging infrastructure. Charging an EV will require a dedicated charger to supply the required power. Unfortunately, these chargers are expensive, and they are not widely available. This lack of infrastructure adds to the overall cost of electric vehicles.

The Electric Motors

Electric cars have one or more electric motors that drive the wheels. These motors are much more efficient than internal combustion engines and have a higher power-to-weight ratio. Unfortunately, this makes them expensive to produce.

The Inverter

The inverter is a key component of an electric car that converts direct current (DC) into alternating current (AC). This is necessary to run the electric motors. Unfortunately, the inverter is a complex piece of equipment, which adds to EVs’ cost.

The transmission

Electric cars have a single-speed transmission, which is simpler and cheaper than the multi-speed transmissions found in regular cars. However, electric motors are more expensive than internal combustion engines.

The Drivetrain

The drivetrain of an electric car is very different from that of a regular car. It consists of the battery, motor, controller, and gearbox. This system is more efficient than a regular car’s drivetrain, but it is also more expensive to produce.

The Body and Chassis

The body and chassis of an electric car are similar to those of a regular car. However, the materials used in EVs are more expensive. This is because they need to withstand the high temperatures generated by the battery and motors.

The Software

Instead of complex mechanical components, Electric cars need sophisticated software to control the battery, motor, and other systems. Developing this type of software is expensive and adds to EVs’ overall cost.

 

Why Are Lithium-Ion Batteries So Expensive?

As mentioned earlier, the battery is the most expensive component in an electric car. In fact, it accounts for around 30 to 40% of an EV’s total cost. Lithium-ion batteries are used in EVs because they have a high energy density and are relatively lightweight. However, these batteries are expensive to produce. The reason is the materials required to manufacture this type of battery. Here are some of the reasons behind the high cost of EV batteries:

  • Lithium-ion needs rare earth materials such as cobalt, lithium, and nickel, which are not readily available.
  • These metals require mining and undergo a delicate process to be used for EV batteries. 
  • The process of mining and extracting these metals is expensive, which in turn raises the price of batteries. 
  • Another reason for the high cost of batteries is that they need to be tested rigorously for safety before being used in EVs. This testing process adds to the overall cost of batteries.

 

Other Factors Affecting the Price of EVs

Apart from the ones we’ve already mentioned, several other factors contribute to making EVs more expensive than traditional vehicles. Below are other areas that play a role in making battery-powered vehicles costly:

  • Research and development: automobile manufacturers invest a lot of resources in the research and development of EVs. This is because they are still a new technology, and a lot of work needs to be done to perfect them.
  • High-end technology: the working mechanism of an EV is very different from that of a regular car. They use high-end technology such as regenerative braking, which is not found in traditional cars. Therefore, automakers are forced to increase the price to offset the cost of this technology.
  • Lack of skilled personnel: EV technology is a constantly-evolving process. Currently, there is a lack of qualified professionals who can maintain and repair EVs. This is one of the reasons why service and maintenance costs are higher for EVs.
  • Car insurance cost: Since the value of EVs is high, the cost of insuring them is also expensive. Ensuring an EV can be 20-30% more expensive than insuring a regular car.

 

Try DATAMYTE!

Did you know that DATAMYTE can help reduce the cost of EV production? That’s right! DATAMYTE’s quality management solution is designed to help you improve your EV manufacturing process and identify areas where you can reduce costs to make production more affordable and sustainable. 

The DataMyte Digital Clipboard, in particular, creates workflows that are specific to the EV manufacturing process. With it, EV manufacturers like you can optimize their operations and ensure that every unit produced meets the highest quality standards.

The DataMyte Digital Clipboard can:

  • Create EV manufacturing workflows
  • Create EV checklists, forms, and other useful tools.
  • Collect data in real-time
  • Analyze data to identify process improvements
  • Deliver data-driven insights to the team.

 

With the DataMyte Digital Clipboard, automakers can optimize their EV manufacturing process and ensure the highest quality standards. Get started with DATAMYTE today! Book a demo to learn more about how DATAMYTE can help you reduce the cost of EV production!

 

Conclusion

Many factors play a role in making electric cars expensive. However, with advancements in technology and mass production, the cost of EVs is expected to decrease in the future. As a result, consumers might have to shell out a bit more to own an EV. But it’ll be worth it, knowing they’re doing their part to save the environment.

 

 

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