MILAN – Raw materials price inflation has hit battery-electric vehicles harder than internal combustion cars, according to a recent report, pushing back cost parity between the two powertrains as Europe tries to cut carbon emissions.
The report, from AlixPartners, found that material costs for EVs were $5,076 per vehicle in September, an increase of $2,152 from the 2020 average. In the same period, material costs for combustion vehicles (including hybrids) were $1,851, up from $1,475 in 2020.
Material costs for plug-in hybrids have not been calculated but are most likely higher than those of BEVs, said Dario Duse, head of AlixPartners in Italy, at a recent event in Milan to present the AlixPartners study.
The costs are for production in Europe and include all key raw materials; costs include both those born by automakers and part suppliers.
According to the AlixPartners report, EV-specific costs account for more than 60 percent of the total for full-electric cars, or $3,100. The remainder is materials common to all powertrains.
Duse said a switch to less-expensive battery materials would help push down EV production costs. Battery-electric vehicles today use lithium-ion batteries, made with lithium, cobalt, manganese and high-grade nickel; prices for these materials have soared recently.
AlixPartners found that material costs for EVs peaked at $6,848 in March 2022. Duse said he expected the recent economic slowdown to push down prices even further.