According to the latest reports of 2019, collected from 43 markets around the world, the average retail price of electric cars was 81% higher than other cars bought by consumers. The competition of EV’s is flourishing along with battery technology and charging infrastructure.
More specifically, even with higher prices EV’s are becoming more prominent in some countries compared more than others. The reason behind this is the high price. Market forces of demand and supply play an important factor when it comes to the price of a product or service. That’s what my $1,500 worth of Economics class at university taught me, but like anything, there’s more to this than meets the eye. Secret government policy levers are the hidden tools used to pull strings that make businesses and individuals dance like puppets. This does not necessarily mean it is a negative manipulation per se.
The EV market is highly affected by government policies. The initial price of EV is the base price and each country has additional costs like Import price, CO2 tax, NOx tax, and Luxury tax. Compare the market completed an analysis that showed the variation in Nissan Leaf in 49 countries using one common currency. The price range extended from the cheapest Nissan Leaf available in Spain for $28,620 USD and to the most expensive in Singapore for $110,326. For context, Australia comes in 17th place at $36,843 USD. Nissan charging tends to be a similar price in all markets
This is a huge gap, a huge variation, a huge range for a similar product across different geographic locations. Does this mean, government policies need to be updated to support EV’s, or is it discretionarily wrong to create artificial support. Even though EV’s production cost remains the same, the pricing of the EV’s is significantly different. However, a deeper analysis shows an inverted truth. It’s not that EV’s are made expensive but it is gas-diesel cars are heavily subsidized. Once an EV is purchased it’s relatively simple to charge. Tesla wall charger can provide 600km a range per charge making running costs lower.
More specifically, Norway has abolished the import taxes for EV’s and started to create taxes for gas-diesel cars. Consumers do not only consider the initial cost but also the ongoing cost. The initial discount savings for the car, coupled with lower fuel, toll, parking, maintenance cost has further contributed to a powerful argument for EV’s to be in the future. This cost can be further reduced if we use renewable sources to charge EV’s. In Australia, the current 40.9 cents a liter can become futile with the expansion of EV. The explosion of electric vehicles has also lead to an explosion of Tesla charging stations and DC charging stations.
In addition, the cost of the EV charging infrastructure also contributes to the cost of the EV industry. The government has promised to inject funds to ease EV in the car industry. Due to the high price, EV’s still remain niche in the market. As the government promises to reduce its nation’s carbon footprint, the downfall of its external cost on EV will be stripped away, giving a fighting chance for EV’s to become more prominent in the market.