EVs Could reach the Same Price to Gas Cars in 2025, says Rowan

Will EVs become more affordable as battery prices fall and manufacturing ramps up resulting in economies of scale have been lingering in our news outlet. However, these points are likely correct as they will occur over time due to COVID-19 pandemic, chip shortage, and skyrocketing gas prices.

Volvo CEO Jim Rowan believes that EVs will reach price parity with their gasoline-powered cousins as early as 2025. Obviously, there are numerous variables at play here. Rowan's optimistic estimate could change if we are still amid a global financial disaster and gas prices remain extremely high.

Regardless of that, he stresses on "all in" for EV future and believes electric vehicles (EV) as well as SUVs will be roughly the same price as today's ICE equivalents in two to three years.

"We think we get to price parity around 2025, where there'll be enough technology that's driving down cost on the battery. Technology will drive range up. Less batteries, but more range, at less cost — we'll get there" he added.

Rather than discussing battery prices in general, the need for fewer batteries for adequate driving range because of technological advancements is far more important as batteries are likely to be the most expensive component of an EV.

Although it does not account for automakers and dealers overpricing electric vehicles, Rowan also stated that businesses should not rely on government subsidies to succeed. They must find a way to manufacture EVs that people want and can afford.

To give you an idea of how far prices need to fall, the current 2022 Volvo XC90 starts at just over RM 230 K ($50,000) and can cost well over RM 323 K ($70,000) if loaded up. In a well-equipped configuration, the upcoming EX90 will cost less than RM 370 K ($80,000).

It's also worth noting that the electric version may be eligible for approximately around RM 35 K ($7,500) tax credit, depending on how everything works out with the Biden Administration's Inflation Reduction Act, which makes significant changes to how the credit works.