Conference Presentation Summary
Direct manufacturing cost of BEV vs ICE
Reference: FEV Consulting Inc., U.S. EPA, 45th International Vienna Motor Symposium
Background
The U.S. EPA has established stringent CO2 tailpipe limits for passenger cars and medium-duty vehicles starting M 2027. We have covered these in an earlier post. The rule will require a fleet averaged 50% reduction in CO2 emissions for light-duty vehicles, over MY 2027 – 2032. The rule, while technology neutral, is clearly expected to promote electrification, and by EPA estimates (shown in the figure) over half of the new vehicle sales will be fully battery electric by 2032.
The EPA, in setting such rules, analyze the cost-effectiveness of new technologies. In a talk delivered at the Vienna Symposium, an example of such an analysis was provided, and we summarize it here. Note that this is limited to direct manufacturing cost, does not cover the markups leading to end customer price and also any reference to the CO2 reduction potential.
Vehicles
Two vehicles of similar vehicle segment – SUVs – and from the same manufacturer were chosen: the VW Tiguan (hybrid) and ID4 (battery electric). The table compares some of the key high-level differences between. The prices shown are MSRP of these vehicles, presumably taken from a public database at the time of the talk. Note of course the difference in battery sizes, and also the weight, which and key determinants of the higher cost of the electric vehicle.
Summary
This is a long paper with a lot of details on various sub-system costs. Here is the summary plot which compares the manufacturing costs – both direct and indirect – for the two vehicles.
The total manufacturing cost of the ID4 is estimated at $33,286, a ~75% or ~ $14K increase compared to the Tiguan, estimated at $19,060. Not surprisingly, much of the increase in cost – ~ $12K – is related to the powertrain.
Also not shown here but understandable, is that the BEV weighs more – 407kg more – of which 282kg increase is associated with the battery pack, Electric Drive Units (EDUs), driveline, power distribution, thermal and power electronics.
Comment
The idea here is to show an example of the relative cost breakdown of the various sub-systems for ICE and BEVs. By the time talks are accepted and published at conferences, the industry has typically “moved on”. The costs in the transportation sector are especially changing very rapidly today, so that it is understood that these should not be taken as a static, final picture. Also not shown here are the OEM price markups, incentives, etc. such that the end price to the consumer is likely different. Finally, this applies to a specific SUV example, the differences will change according to the vehicle segment (likely magnified for larger vehicles due to larger battery pack).
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