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Ask HN: Why are EVs significantly more expensive than Gasoline Vehicles?
8 points by vkdelta on June 27, 2022 | hide | past | favorite | 20 comments
- fewer number of parts - faster manufacturing since IC engine has a lot more parts - Battery manufacturing has been a while now (EVs still same cells as other applications) - In general, much lower BOM (Bill of Material) - granted, Software is more advanced but if we take Tesla out of picture, rest of the EV companies, have standard software - Is due to economies of scale problem?

Please ignore current supply chain shortage issues as that is temporary (hopefully) and EV's were expensive prior to covid as well



Disclaimer: I have no inside knowledge.

I _suspect_ it's two things:

Firstly, as you suggest, is a lack of economies of scale, startup expenses, high R&D costs, etc. Existing car companies can do a lot of the EV manufacturing with known techniques, existing machinery, etc.

But secondly, at least Telsa has an absurdly high profit margin compared with traditional high-volume models. They're taking the luxury route of a smaller sales volume, higher per-unit costs, and making a good profit off each vehicle.

In short .. because they can.


EVs, while often talked about, are a very small percentage of the market so they have nowhere near the economies of scale of IC engine cars. With a smaller market, they need to spread R&D costs across fewer vehicles.

A lot of companies are also adopting the Tesla model of starting at the high end and working down. It's a lot easier to build in margin on higher end products. If companies start at the low end with a cheap EV, they may not be able to meet demand. The start ups also don't have the manufacturing chops of the older car makers, which is why you see them making really expensive cars... they know they can't scale yet. Ford on the other hand has priced the Mustang EV and Lighting pretty reasonably. I see the Mach-E all over the place and I'm sure I'll see the Lightning everywhere soon.


What you're describing is the situation in the West. In China there are hundreds or thousands of startups making cheap city EVs, most of them under $10K.


They would be also classified as micro cars or straight out electric bikes with a roof. So it really depends what you define as a car.

I.e. A tent can be house too, but I don't think that most of people want to buy a place for tent when they are talking about buying a house.


No, they are real cars - https://www.youtube.com/watch?v=tkOqIEUAlw4


They max out at 62mph, which would make them not legal to drive on most highways in the US. Saw some reviews from people who actually got it in the US, and they mentioned that they cannot go on any roads that have a speed limit above 45mph.

At this point, might as well buy a motorcycle and actually stay highway legal.


Pretty damn cool, but won’t come close to passing and NHTSA safety test in the USA.


I guess the "NHTSA safety test" is about high speed highway collisions. IHMO there should be a separate test for purely city cars, that move a lot slower.


Actually it’s 35mph. And we have never had a set of regulations strictly for “city cars “, an impulse I certainly appreciate but which in practice would be difficult to manage, I think.


EVs generally are not more expensive than ICEVs. E.g. Citroen AMI https://www.youtube.com/watch?v=977cZO0qXEs . A huge number of startups in China are making cheap city EVs. You can order one on AliExpress.

In Europe and America most of the EVs on the market (maybe due to regulation or to car makers greed) have huge batteries with DC charging. Said batteries are extremely expensive compared to ICEV fuel tanks, that do the same job - store the energy to move the car.


Demand. Total cost of ownership can’t be too much lower than ICE vehicles. As EVs TCO goes down the price has to go up to keep demand in check.


Batteries. In 2010 batteries cost appx $1,200 per kWh. In 2021 it was $132 per kWh. That's significantly cheaper but you still need anywhere from 60 - 200 kWh of battery for a decent range. That can add anywhere from 8k to 26k to the cost.


When you assemble a car, you generally don't put together the engine at the same time. You get the engine as completed unit, and put it where it goes (with a hoist or so) and bolt it down, etc. Sure, there's an assembly line somewhere else putting together engines, but electric vehicle assembly doesn't assemble the electric motor(s) during vehicle assembly either.

EV batteries take up a lot of space and that likely complicates assembly. My plugin hybrid has about 20 miles of EV only range, and loses 5 cubic feet of storage for the extra battery vs the hybrid model; 5 cubic feet is about 37.4 gallons.

I suspect battery costs are higher than you think.


The light bulb was a great invention but what really changed the world was the lightbulb making machine.

Billions have been invested in engine and transmission design and manufacturing optimization. Engines are surprisingly cheap to make.

Emissions and efficiency requirements have made them more complex.

I wonder if the last hurrah will be an engine with fully electrically controlled valves, like Koenigsegg already has. Getting rid of all belts and chains could be great for reliability. All pumps would be electric.


Early models of new drive trains and chassis are always more expensive to absorb the cost of retooling factories, regulatory compliance, and NREs involved in the development. Combine that with uncertainty (no one knows the real demand of EVs, since they aren't mass marketer yet) and you have a recipe for "expensive."

It's impossible to ignore the supply chain problems as there were not EVs available prior to 2021/2022 from most manufacturers.


Expensive raw materials which are raking up prices as demand grows and supply can't. It is like a reverse economy of scale - the more OEMs do, the more expensive end product will become because more entities will be competing for limited supply of current mining output of lithium, cobalt, nickel and copper.


They aren't. See the average EV in China.


Price is not set based on cost. It’s based on willingness to pay. If a car company can charge more, they will.


No, it's based on a combination of production cost and willingness to pay. Supply and demand.


Batteries are still really expensive.




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