Volvo's CEO, Jim Rowal, has ventured to put a deadline on one of the industry's most anticipated events: the day when electric and thermal vehicles are priced similarly. Rowal predicted that price parity will be attained across all brands in three years. This will only happen once, and there is no set date on which it will start happening.
It is self-evident that prices must fall if we see widespread adoption of electric vehicles in Europe and the rest of the world. Designers, executives, and consumers have been mulling over the possibility of reduced costs for quite some time, but concrete evidence of this has yet to emerge. That plan is in jeopardy due to the precarious state of the global economy. Everyone's costs are rising, not helping with sales and manufacturing expenses.
While the market for electric vehicles is expanding rapidly in some regions, such as China and Norway, others, like Spain, need to catch up. There is no solid evidence that parity between thermal and electrical rents will occur soon, at least not as we expect, which is a significant disadvantage for buyers in the European Union. In light of the current price trend, it seems increasingly plausible that gasoline-powered vehicles will overtake electric vehicles in popularity rather than the other way around, as was widely predicted. Due to this, it will be challenging to purchase a brand-new electric car in some regions.
Jim Rowal has high hopes for the market potential of his automobiles. Volvo entered a new era with the introduction of the Volvo EX90 electric SUV. Price points for the flagship's impressive array of technology and systems, unveiled last week, have yet to be published. No one is under the impression that the Volvo EX90 electric SUV is a budget vehicle, with estimates putting the base price at least $90,000. Rowal still needs to reveal how they plan to get the equality they've been discussing.
The Geely Group, a prominent participant in China's electrical industry, is quickly catching up to Volvo. Volvo, Zeekr, Smart, Polestar, Lynk & Co., Lotus Cars, and many more are just some of the brands that the company has produced. All of its products are aiming for a zero-emissions future by integrating systems and technology that will make it possible to reuse parts across lines. Because of this, they can recycle parts and increase the profitability of each model as manufacturing increases. However, not all brands had such good fortune.
Given that an electric car's battery is its costliest component, Volvo's CEO is confident that improvements in vehicle economy will lead to price reductions. This is because the same number of kilometers can be traveled with smaller packages. Nonetheless, nothing is happening in the external world that lends credence to Rowal's claims. Raw materials are still rare, or only in the hands of a select few, inflation is through the roof, and supply issues are par for the course. Let's keep our fingers crossed that the market reaches parity by 2025, even though nothing currently suggests this will occur.
