Price of electric cars to halve in five years

EVs that are $70,000 today could be $35,000 tomorrow, says Mitsubishi, with prices set to tumble as the cost of technology drops
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Mitsubishi, the maker of the first electric car to be sold in Australia, predicts the cost of electric vehicles will halve in the next five years.

Speaking at an end of year function in Melbourne yesterday, the president and CEO of Mitsubishi Australia, Masahiko Takahashi, told the media that the cost of battery technology was improving at a faster rate than the automotive industry had predicted. This means that the second generation of battery-powered electric cars could be a fraction of what they cost today, he implied.

The Mitsubishi i-MiEV electric car costs close to $70,000 once the lease cost is accumulated over a three-year term – and even then the car must be returned to Mitsubishi at the end of the agreement.

"Look at plasma televisions. When they first came out they were outrageously expensive but they fell in price very quickly and that's what will happen with batteries [for electric cars] as well," said Mitsubishi Australia product planner, Chris Maxted.

When asked how long before electric vehicles would be similarly priced to petrol cars, he said: "Five to seven years is about the right timing.

"We can't underestimate how much money is being spent on battery technology. The finance industry has seen it before the auto industry has and they're throwing big money at battery technology. With billions of dollars anything can be achieved," Maxted opined.

The Mitsubishi exec said that cost, driving range and charging time will all improve with the second generation battery technology.

"It all comes down to economies of scale. With volume, anything can be achieved," he said.

Production of the i-MiEV topped 5000 in Japan last month, but the company said sales of its electric car would increase to 40,000 a year within two years – plus it will make 100,000 cars per annum for French carmakers Peugeot and Citroen.

"This has all been down to bring cost down. By dramatically increasing economies of scale you reduce the cost of the technology," he said.

Meanwhile, Mitsubishi also announced it will install Australia's first fast-charger for electric cars in Adelaide later this month. The Fast Charger will top-up i-MiEV's Lithium-ion battery to 80 per cent capacity in just 30 minutes and a 50 per cent charge can be completed in less than 12 minutes. The battery can also be charged from a normal 15 amp domestic household power supply, taking about seven hours to reach full capacity.

Maxted said price and driving range were the biggest hurdles to be overcome by electric cars but the technology is changing rapidly.

"Our longer term strategy over this decade is to get to the point where an electric car is a drivetrain option as simple as choosing between diesel, petrol or EV," he said.

"It is a technology that can be applied to anything. An electric car is just a car. It's not just city cars. The technology is appearing on city cars first but it can be applied to all types of vehicles from sports cars to 4WDs."

He said the car industry needed to remove all compromises from EVs before buyers would embrace them in large numbers.

"Environment is a bit like safety," he said. "Everyone wants it but how much are people prepared to pay in terms of dollars and to change their lifestyle? Probably not much in terms of dollars and they don't want to change their lifestyle, so it's up to us to give them a vehicle they want."

Maxted said there will be hybrid or electric SUVs on sale before the end of this decade.

"SUV buyers in five six or seven years hopefully won't be seen as environmental vandals that some people like to make them out to be," he said.

"If you recharge from renewable energy sources, electric cars are completely clean."

He said the latest estimates predicted driving ranges of up to 800km by the end of this decade.

"I'm not convinced recharging is such a big issue in Australia. As battery performance improves the need for recharge infrastructure diminishes. How many petrol stations would we need if we all had a petrol bowser in our driveway? Electricity is more widely available than petrol."

Meanwhile, Mitsubishi is poised to introduce a Toyota Prius-like plug-in hybrid mid way through next year – but details on the type of vehicle and cost were yet to be announced.

"In many ways plug-in hybrid technology is a stepping stone to full electric cars but we will be in that market as well," Maxted said.

"We hope to have our second generation products out there when others have their first generation electric cars and plug-in hybrids out there," he said.

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