Replying to myself: One thing the above does not take into account is the feeling of a BEV, which internal combustion and weak hybrids simply cannot match. I deeply feel that luxury customers will demand strong electrified powertrains after experiencing them.

Strong hybrids could match the feeling of a BEV, at a similar per-unit cost.

One issue is engineering and certification costs - manufacturers can only do so much at once or else shareholders get anxious.

Also not included are warranty reserves (how much to set aside per vehicle for warranty costs). More complicated vehicles call for more reserves.

> One thing the above does not take into account is the feeling of a BEV, which internal combustion and weak hybrids simply cannot match.

I absolutely agree about most luxury customers. However, there are certainly those of us in the minority who favor a more mechanical experience when driving a car, and most electric cars seem to move even further away from this in pursuit of efficiency, etc. Consequently, I don't think this market will exist for much longer once driving becomes more commoditized.

I'm certainly on a tangent by now, but there an interesting piece by Malcolm Gladwell in Car and Driver about a possible result of the rise of autonomous cars on car culture today: www.caranddriver.com/features/when-autonomous-cars-rule-what-will-happen-to-car-culture-feature

The big error in your calculation is, that you calculate only the cost of the battery, but not the cost reduction of removing the most complex parts of a combustion engined car: the engine itself, the gearbox and the whole exhaust system including cleaning. If you calculate this in, you should come up with very different numbers - a lot of experts think, that electic cars might be even cheaper to buy in the early 20ies years.

You are correct, it is napkin math after all. Assuming similar sales between mild hybrids and BEVs, the eventual cost of a BEV is probably only $2,000 to 3,000 more in the short term... but consumers make decisions based on differences $500 or even less.

I could do some more napkin math with engineering costs, unit costs, Bills of Material and amortization schedules... but you can be assured that automakers have done more than napkin math, and they are pursuing (as an aggregate group) both technologies.

The business cases for each of MHEV and BEV make different assumptions. I think it's great that different methods are being pursued. Eventually some automakers look very silly, but you can't tell which ahead of time.

So far electric cars cost more than ICE including this cost reduction

That is correct. Most car manufacturers currently pay way more than $100 per kWh battery capacity. Also, the electrical vehicles are made in much smaller numbers than combustion engined ones, raising production costs considerably. But for a long-term calculation, you cannot ignore the cost savings of leaving off all the combustion-related technologies. And that there are significant cost savings should be obvious.

>Gasoline will never exceed $10/gallon.

The consequences and repercussions of global warming and climate change plus Nixon era doctrine of interventionalist policy in the interest of maintaining global US oil hegemony have easily put real barrel cost easily above this. Iraq didnt pay for itself twice, after all.

Why everyone talks about switching to electric cars while nobody ever mentions electric heating of buildings as environmentally friendly alternative? Because it isn’t? Why bother with electricity-saving lightbulbs while EV owners burn the current like there’s no tomorrow...

There's plenty, like a lot, of shale oil available at $80-100/bbl, which allows for significantly less than $10/g gas.

The only meaningful challenge to $10/g gas is policy (ie taxation).

Algae derived oil, if it could be made to work at scale, has none of those problems. It is a not unreasonable upper limit for a totally renewable source of petrochemical fuel.

In most of Europe, gasoline is already close to 10$/gallon (1.50€/l or more).