(ORDO NEWS) — One of the main obstacles to the mass adoption of electric vehicles is cost. Electric vehicles are simply too expensive, with the average price already at an all-time high of $66,000.
This is disappointing to buyers because the auto industry has promised prices will come down as EV batteries become more efficient to manufacture.
But even more disappointing is the rate at which prices of electric vehicles have risen relative to their gas equivalents. According to a recent analysis by the iSeeCars car buying database, electric vehicle prices rose 54.3 percent year-on-year, while gas-powered vehicles rose just 10.1 percent.
The reason electric car prices have skyrocketed at such a staggering rate is multi-layered. There is a global shortage of chips that has caused huge production problems in the industry and led to a drop in car sales.
And, perhaps ironically, high gas prices forced car buyers to buy up every electric vehicle they could find from dealers, causing inventories to plummet.
To determine the increase in the price of electric vehicles compared to conventional fuel vehicles, iSeeCars analyzed the prices of more than 13.8 million used vehicles sold between January and July 2021, as well as vehicles sold during the same period in 2022. .
Analysts found that electric vehicle prices rose 54.1 percent in January 2022 from the previous year, thanks to high gasoline prices.
Price increases for both electric and gas-powered vehicles eased in March, but while they continued to decline for conventional vehicles, they rose again for electric vehicles and just continued to rise over the summer.
More broadly, electric vehicle prices are rising amid changing market conditions and rising raw material prices, especially key materials needed for electric vehicle batteries.
Battery prices have been on the decline for years, but some experts predict that a surge in the amount of minerals in batteries over the next few years could drive up cell costs by as much as 20 percent.
So while the price shock is likely to remain a major hurdle to the mass adoption of electric vehicles.
“More and more affordable new EVs are coming to the market, which means used EVs won’t be all that new, especially once supply chain issues start to improve,” said iSeeCars executive analyst Karl Brouwer.
“While potential used car buyers will see a sharp increase in electric vehicle prices in the short term, it is important to be patient because used electric vehicle prices are expected to come down in the coming months.”
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