Explained: Why Electric Cars Are More Expensive Than Conventional Petrol, Diesel Engine Cars

The demand for electric vehicles witnessed a massive surge owing to their environment-friendly nature and growing concerns over climate change. Though people were initially skeptical while buying them, the EVs have gradually become a preferred choice of people across the world. 

However, people still have a lot of questions, one of them being ‘Why do EVs cost more than their ICE counterparts?’ For instance, Tata has recently launched their facelifted Nexon and Nexon.ev. The prices for the ICE Nexon start from Rs 8.10 lakh and go up to Rs 13 lakh, whereas, the prices for the Nexon.ev start from Rs 14.74 lakh and go up to Rs 19.94 lakh. 

It is evident that there is a striking difference in the price ranges of both these models, even though the built structure, exterior design and interiors of the car are almost identical.

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Why are EVs expensive?

Arguably, there is only one major factor contributing to the upscaled pricing of EVs across the world: Batteries. The main reason electric cars are costly is because a big part of their cost, around 40-45%, comes from the battery. The prices of batteries are going up because the demand for the components making these rechargeable batteries is surging. This high demand is making batteries more expensive.

What makes these batteries expensive?

Batteries used in electric vehicles are made from parts that are exported from all over the world. The technology used in these batteries is different from regular ones as they are large rechargeable batteries that are meant to last a longer period of time. They are like the rechargeable batteries in your laptop or phone, but much bigger to store more energy. 

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The most expensive part inside each battery is called the cathode, which is responsible for storing and releasing energy. The materials used in cathodes, like metals such as cobalt, nickel, lithium, and manganese, can be costly because they have to be mined from the ground, processed and turned into high-purity chemical compounds. Hence, making the production cost of the EVs much higher than the regular cars.