Economies boost outlook for electric vehicles profitability

The electric cars are expensive to develop and the lithium ion batteries packs are a complex new technology (at this scale and performance) and currently more expensive to build than traditional internal combustion engines.

As a consequence, electric vehicles have either been high-priced niche products or limited production concept vehicles. Our objective has always been for the price of our zero-emission vehicles to be at the same purchase price as a comparable gasoline or diesel engined vehicle.

To achieve that aim – of mass marketed electric vehicles – the Alliance has always worked towards economies of scale that will make electric vehicles equal to ICE vehicles – without incentives – on a cost per mile basis at 1 million annual sales of electric cars.

Already, that equation is changing.

The more we learn about zero emission technology, the more visibility we have on the evolution of costs and the more we see consumer demand increasing for these products, so we are evolving our view on the volume it will take to the are now more confident about the volumes we can produce and sell than we were two years ago.

Also, because we will be producing our own lithium ion batteries, we can achieve the economies of scale required to bring the costs down, and we think this is now somewhere between 500,000 and 1 million electric vehicles.

The delivery of the world’s first mass marketed 100% electric vehicle starts in the US and Japan in December. What is already clear from the reaction, is that we are launching something much more significant than a new car.