For decades, one expert after another predicted the demise of crude oil, but through even twist and turn oil prevailed and just when it looked like everything was in favour of higher oil prices, the bottom fell out of the oil market. Crude oil experienced one of the most horrific crashes ever, and billions of dollars of equity were wiped, some firms were destroyed forever. The once booming field of fracking experienced a massive break-down and individuals who though their livelihood was secure for years to come, suddenly had to face the bitter reality that the good old days were over and possibly forever.
Fantastic Read: Perception Wars; You see what you are directed to see
The inflection point was hit back in 2013 when 143 gigawatts of renewable energy were added versus 141 gigawatts that came from traditional power plants that burn fossil fuels. In most cases, the cost of solar energy is on par if not cheaper than grid electricity. This is perhaps why the House of Saud (Kings of Terror) are panicking and want to destroy competition so that they can push prices back up and try to lock in as much money as they can before they knocked out of the game. They are so desperate that they are even planning on selling shares in Aramco. However, the trend is against them, and they will have to learn to live in an era where oil is no longer king.
It’s all about the cost of batteries, once the price of batteries drop, the cost of an EV will drop.
33% of the cost of an EV is the battery, and so it goes without saying if that cost can be lowered, the price of an EV will drop significantly. According to an article in Bloomberg, three things need to happen for prices to drop significantly
Governments will have to offer the right incentives to drive prices lower; this is already occurring to a small degree via rebate programs.
Manufacturers will have to accept very low-profit margins. This is not necessarily true if the cost of the battery is driven low enough, and then there would be enough profit per unit to get the big guys excited about ramping up production.
The cost of batteries will have to drop, we agree with this, they will have to drop, and they will drop as indicated by the chart above
The chart above illustrates just how fast the cost of batteries is dropping. We expect this trend to gather even more steam, so the figures above will look outdated in 1-2 years. Technology is coming out with innovations at a mind-boggling rate, so it’s just a matter of time before the cost of batteries drops to a level that will make EV’s even more affordable than fossil powered vehicles.
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