They noted the price difference between traditional internal combustion vehicles (ICVs) and electric vehicles (EVs) was already narrowing as battery prices fall, but prices might not need to fall much for consumers to make the leap.
“Concerns about scrap values of ICVs may drive consumers towards EVs even before the price differential between the two classes of vehicles closes,” JPMorgan said.
It estimated electric cars would take 35 percent of the global market by 2025 and 48 percent by 2030.
That’s going to create some clear losers in an industry that’s been spreading its tendrils for more than a century.
For one, adoption of electric vehicles means much lower maintenance costs for consumers, the analysts said.
“EVs have 20 moving parts compared to as many as 2,000 in an ICV, dramatically reducing service costs and increasing the longevity of the vehicle,” the analysts said, adding that it estimated running costs for an electric vehicle can be around 10 percent of an internal combustion one.
“We see this as a meaningful risk for car dealers who rely on after-sales service for a large chunk of their profitability,” the note said. “This should over time reduce the number of vehicles sold as well, in addition to other potential trends, such as automated driving and greater car utilization rates.”