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The most expensive part of an electric car is its battery. The price decreased from €605 per kWh in 2010, to €170 in 2017, to €100 in 2019. When designing an electric vehicle, manufacturers may find that for low production, converting existing platforms may be cheaper, as development cost is lower; however, for higher production, a dedicated platform may be preferred to optimize design, and cost.

Total cost of ownership[edit]

In the EU and US, but not yet China, the total cost of ownership of recent electric cars is cheaper than that of equivalent gasoline cars. This is due to lower fueling and maintenance costs.

The greater the distance driven per year, the more likely the total cost of ownership for an electric car will be less than for an equivalent ICE car. The break even distance varies by country depending on the taxes, subsidies, and different costs of energy. In some countries the comparison may vary by city, as a type of car may have different charges to enter different cities; for example, in England, London charges ICE cars more than Birmingham does.

Purchase cost[edit]

Several national and local governments have established EV incentives to reduce the purchase price of electric cars and other plug-ins.

As of 2020, the electric vehicle battery is more than a quarter of the total cost of the car. Purchase prices are expected to drop below those of new ICE cars when battery costs fall below US$100 per kWh, which is forecast to be in the mid-2020s.

Leasing or subscriptions are popular in some countries, depending somewhat on national taxes and subsidies, and end of lease cars are expanding the second hand market.

In a June 2022 report by AlixPartners, the cost for raw materials on an average EV rose from $3,381 in March 2020 to $8,255 in May 2022. The cost increase voice is attributed mainly to lithium, nickel, and cobalt.

Running costs[edit]

Electricity almost always costs less than gasoline per kilometer travelled, but the price of electricity often varies depending on where and what time of day the car is charged. Cost savings are also affected by the price of gasoline which can vary by location.