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What would it take to charge up the electric vehicle market?
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From American public media, this is Marketplace Tech.
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I'm Megan McCarty-Karino.
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Marketplace Tech is supported by GEP with GEP key agentic AI and GEP smart software.
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GEP is at the forefront in agentic procurement orchestration and autonomous supply chains.
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Seems like every time we get a spike in gas prices, more people start talking about switching
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to an electric vehicle.
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But what converts that talk into action?
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Generally, according to market experts, it comes down to the upfront cost.
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Cars are expensive, and electric cars tend to be even more expensive.
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But that could change in the next few years as Marketplace's Novasafo reports.
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Americans just don't buy electric vehicles in large numbers.
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And the primary reason for that is the sticker price, says Stephanie Valdez-Streeti, of
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the data firm Cox Automotive.
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We still have a price premium for EVs, so we need more affordable, compelling EVs to
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really get into that next wave of adoption.
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Our premium averages $8,000 over the cost of gasoline vehicles.
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And the single biggest reason is the battery inside.
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Since the battery is about 40% of the cost of a vehicle, the battery price going down
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is going to be critical.
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And we've seen that, right?
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The place we've seen that is China.
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We'll be right back.
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You're listening to Marketplace Tech, I'm Megan McCarty-Karino.
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We're back with Marketplaces, Novasafo.
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One in every two Chinese consumers in the market for a new car are buying electric.
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In part, that's because of government incentives.
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But the main reason, says Colin McCarty-Karino, of research firm Bloomberg and EF, is that
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Chinese car buyers are seeing very different sticker prices than consumers in the US.
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When we look at the average purchase price of different vehicles in a market like China,
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they are on average that EV is now fully cost competitive with internal combustion engine
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vehicles in terms of sticker price.
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China got there by integrating supply chains, a process the US is undertaking as well.
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More importantly, China bet on the right battery technology.
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The West bet on NMC.
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That's nickel-manganese cobalt batteries, which need those namesake and expensive rare
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Lithium iron phosphate batteries, bulkier but cheaper because iron is abundant.
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Macarachra says over the last decade or so, Chinese engineers have improved LFP batteries.
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They're now smaller and charge faster.
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That's made them attractive to automakers.
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It has become the main battery technology going into EVs around the world.
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So just last year, it crossed over 50% of all batteries going into EVs around the world
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are Lithium iron phosphate batteries.
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And as automakers accelerate adoption, electric vehicles in the US are forecast to get cheaper.
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Analysts say they'll cost the same as internal combustion engine vehicles or ice vehicles
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in industry parlance in the next three to four years.
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Among those making that prediction is CJ Finn.
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He leads advisory firm PWCs, automotive division.
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In order for adoption in the US to occur, it's an economics game in that 15 to 20% premium
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that battery electric vehicles have to the ice vehicles that needs to come down and we
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Once that happens, Finn expects electric vehicle sales here to accelerate to as much as 30%
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of all new vehicle sales.
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With hybrids taking about another third or slightly more than that and ice vehicles being
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It will be a dramatic change.
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Last year, just 22% of all new vehicles purchased in the US were electric or hybrid.
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That was Marketplaces, Nova Sofo.
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I'm Megan McCarty-Korino and that's Marketplace Tech.
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