Abstract:

This study analyzes bottom-up vehicle component-level costs to assess average battery electric vehicle (BEV), plug-in hybrid vehicle (PHEV), and conventional vehicle prices across major U.S. light-duty vehicle classes through 2035. These cost estimates are used to evaluate broader consumer benefits, as well as to discuss the implications for vehicle emission regulations in the United States. The analysis finds that price parity with convention vehicles will occur between 2024 and 2026 for 150- to 200-mile range BEVs, between 2027 and 2029 for 250- to 300-mile range BEVs, and between 2029 and 2033 for 350- to 400-mile range BEVs. Pack-level battery costs, which have a key impact on price parity timing, are expected to decline to about $105/kWh by 2025 and $74/kWh by 2030 due to technological advancements and increased production volumes. Increasing the annual battery cost reduction from 7% to 9% typically accelerates the timing for parity by about 1 to 2 years, while decreasing the annual battery cost reduction from 7% to 3% typically delays parity by about 1 to 4 years.