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BMW: Electric cars will never be as cheap as a combustion engine

Electric cars will always carry a price premium

The question of whether electric cars will ever be as affordable as their conventional counterparts has been emphatically answered by BMW, with a key board member saying “never, never, never”.

Speaking from the Paris motor show, BMW board member and head of research and development, Klaus Fröhlich, doused any hope of combustion engine price parity with electric vehicles, saying the sheer cost of production meant battery EVs would always be more expensive than their conventional equivalents, or were destined to be subsidised forever.

Asked whether there would come a time when battery electric vehicles would cost the same as a internal combustion engines, Mr Fröhlich didn’t mince his words.

“Never, never, never,” he said. “It is very simple. If you are at full scale, one kilowatt hour of battery capacity will cost between 100 and 150 euros ($150-$240). So this means if you see a car with 90 to 100kWh, the cell cost alone will be 10,000 to 15,000 euros ($16,000-$24,000).

“You can produce whole cars just for the cost of the battery."

The purchase price of battery-powered vehicles is considered one of the major sticking points in markets where EVs aren't subsidised, with electric cars significantly more expensive than their conventional counterparts. In Australia, for example, the BMW i3 EV starts from almost $70,000, while the same money would purchase much of the larger 3 Series range, including the 330e hybrid.

Many markets turn to government subsidising to reduce the gaps. In China, for example, some EVs are eligible for state and federal subsidies of up to $14,000. But in markets where those subsidies don't exist - like Australia - it was hoped increased production would bring economies of scale that would drop the outright price of an EV.

Not so, says Mr Fröhlich.

“You don’t have economies of scale. When everyone wants to use cobalt, the price of cobalt will not go down, it will go up," he says. “It’s a nightmare that an electrified vehicle will cost the same as a combustion engine.”

But if you're willing to swallow the purchase price, there are immense savings to be had over the total life of an EV. A recent university study in the USA found the annual cost of running an electric vehicle was less than half that of a petrol car.

Are you willing to pay more for an electric car? Tell us in the comments below.