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Will Electric Cars Cost Less Than Traditional Cars by 2025?

Need another reason to buy electric? How about more cash in your wallet? According to new research, electric cars will soon be less pricey than conventional gasoline ones.

The data, recently released by Bloomberg New Energy Finance, indicates that falling battery costs will mean electric vehicles will also be cheaper to buy in the U.S. and Europe as soon as 2025. Batteries currently make up about half the cost of EVs, and their prices will fall by about 77 percent between 2016 and 2030, the London-based research organization said.

Significant savings are sure to be a boon to customers, offering immediate savings to drivers looking to save a few bucks.

Automakers such as Renault SA and Tesla have long praised how cheaper fuel and running costs of electric cars help offset the higher upfront prices that drivers pay when they fork over cash for a zero-emissions vehicle.

“On an upfront basis, these things will start to get cheaper and people will start to adopt them more as price parity gets closer,” said Colin McKerracher, analyst at Bloomberg New Energy Finance. “After that it gets even more compelling.”

Renault, creator of the Zoe electric car, predicts total ownership costs of EVs will be the same as conventional internal combustion engine vehicles by the early 2020s, according to Gilles Normand, the French company’s senior vice president for electric vehicles.

In an interview earlier this month, Normand explained how there are two factors: “One is EV technology cost reductions because there are more breakthroughs in the cost of technology and more volume, so the cost of EVs will go down.” Internal combustion engine costs will go up as a result of more stringent regulations, he continued.

This may be just what consumers need to take the EV plunge.

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