The big problem with Electric Cars, despite the fact that they are cheaper to run and maintain than are gasoline powered vehicles, is that they have high upfront costs. A typical electric car, say one sold by Elon Musk’s Tesla Company, costs as much as a luxury vehicle that runs on gasoline. The upfront costs of EVs place them out of reach of most middle and working class drivers. But that fact is about to change, according to a recent piece in Bloomberg.

Half the cost of an electric car is the batteries

Electric cars are so pricey because of the high cost of the lithium-ion batteries that make them go down the road.

The batteries currently make up half of the expense of an electric vehicle. The high cost also means that swapping out worn out batteries can be very expensive.

However, according to Bloomberg New Energy Finance, the cost of electric car batteries are due to decrease by 77 percent by 2030. The decline in price means that Electric Vehicles will be cheaper than gasoline cars of the same class and model by 2025. The drivers are improved technology and steadily increase in sales. Electric cars, like a lot of other products that only the wealthy could afford, will be available for the masses in about eight years.

But by 2025, will people even want to own cars of any kind?

While the cost of electric vehicles continues to decline, the technology of autonomous vehicles continues to improve.

By 2025 it is entirely possible that most people will do their daily commutes or nights out on the town in vehicles that have been summoned for the ride that are driven by an onboard computer and a suite of sensors.

The primary customers for these new electric vehicles won’t be private individuals, but companies such as Uber and Lyft who will maintain fleets of the vehicles ready to be summoned on command.

If technology and volume make these cars cheap, then big companies can snap up thousands of them and put them on the road for cheap rides with anyone with the smart app to call them.

What will the oil companies do now?

Of course, the future in which people hire rides on electric cars means bad news for Oil Companies. Electric cars mean that the market for gasoline and diesel will go on a steady down curve into oblivion.

The development is ironic, considering that the fracking boom has made fossil fuels cheaper than ever. Exxon and other companies need to start planning accordingly for a post-gasoline world.

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