Volvo: “By 2025, electric cars will be as expensive as petrol cars”

In another three years, electric cars will be just as expensive as petrol cars, says Volvo boss Jim Rowan. That’s what he said when introducing the new EX90.

Currently, electric cars are still much more expensive than comparable fuel-powered cars. This is primarily due to the high cost of the battery. But Volvo believes the difference will disappear in three years.

Volvo: “Fewer batteries needed for more range”

“The technology will be ready by 2025,” director Jim Rowan told Automotive News Europe. “We then need fewer batteries for the same range, which reduces costs. That will happen.”

In addition, more and more electric cars are being built and sold worldwide. And that creates financial economies of scale.

Next electric Volvo below the XC40 and C40

Volvo plans to only build fully electric models by 2030. The new EX90 will be placed above the XC40 and C40 in the delivery program. The next electric Volvo will be smaller than the last two.

Premium brands can play with margins more easily

We need to nuance Rowan’s statements about price parity in 2025. Volvo is a premium brand with higher prices and margins. It may choose to take less slack to achieve this equality. A volume manufacturer cannot do that.

Battery prices have fallen by more than 80 percent

Batteries for electric cars are still expensive, although prices are falling sharply. They have fallen by more than 80 percent over the past 12 years. E-motors have just become a quarter more expensive.