Key takeaways:
- Electric Vehicle (EV) production costs to drop significantly by 2027, which will make them cheaper to produce than comparable gasoline-powered cars
- New manufacturing techniques like centralized architecture and gigacastings are driving down production costs
- EVs may reach price parity with gas cars faster than expected, but some repairs could become more expensive
- EV market consolidation is expected with weaker companies likely acquired or going bankrupt by 2027
- The overall EV market is still projected to grow, with global shipments reaching 20.6 million units by 2025
Next-generation electric vehicles (BEVs) will be cheaper to produce than comparable gasoline-powered cars by 2027, according to research firm Gartner. This is due to new manufacturing techniques that are simplifying production and reducing costs.
“New automakers are heavily redefining the status quo,” said Pedro Pacheco, Vice President of Research at Gartner. “They’ve introduced innovations like centralized vehicle architecture and gigacastings that reduce manufacturing costs and assembly time. Traditional automakers are being forced to adopt these methods to stay competitive.”
While production costs are dropping, Gartner also predicts that repairs for BEVs will become more expensive. The average cost of a major body and battery repair for an electric car is expected to increase by 30% by 2027. This could lead to more totaled vehicles after accidents, as repairs may exceed the car’s value. Additionally, these pricier repairs could translate to higher insurance premiums or even make it difficult for some electric vehicles to obtain coverage.
Gartner warns that automakers should not prioritize lower production costs at the expense of higher repair costs. This could lead to consumer backlash in the long run. New manufacturing processes should be developed alongside methods for ensuring affordable repairs.
EV market consolidation expected
The rapid growth of the electric vehicle market has attracted many startups, some of which are heavily reliant on outside funding. As government incentives for EVs are phased out and competition intensifies, Gartner predicts that 15% of EV companies founded in the past decade will be acquired or go bankrupt by 2027.
“This doesn’t mean the EV sector is collapsing,” said Pacheco. “It’s simply entering a new phase where the companies with the best products and services will prevail.”
The EV market is expected to continue growing in the coming years, with Gartner estimating global shipments to reach 18.4 million units in 2024 and 20.6 million in 2025.
However, the focus is shifting from a “gold rush” mentality to a “survival of the fittest” environment. Companies that can best meet the needs of early mainstream EV adopters will be the ones to succeed.
The Philippines: A growing EV market with challenges
The Philippines represents a growing EV market with significant potential. The market is primarily driven by e-tricycles, e-motorcycles, and e-jeepneys used for public transportation. However, the personal EV market remains small, catering mainly to the upper class. Government support is crucial for further growth, but policy uncertainties, high upfront costs compared to traditional vehicles, and limited charging infrastructure remain significant barriers.
Despite these challenges, the Philippines’ EV market is expected to expand due to rapid economic development, limited public transportation options, and initial government support.Ⓒ
Business Bayani PH 
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