The Cause Of Electric Cars In The World Is Still Expensive According To Toyota

Booth Toyota at the 2023 Japan Mobility Show. (Doc. Global Toyota)

JAKARTA - The biggest component affecting the price of electric cars is batteries. Although battery prices have fallen significantly in recent years, they are still playing a major role in determining the price of electric vehicles.

However, there are other additional factors that make the price still high. Toyota Daihatsu Engineering & Manufacturing President & Executive Chief Engineer Yoshinki Konishi explained the reason the current price of electric cars is relatively expensive.

"I agree, the price of electric cars is still very high, you have to have certain income to buy it, right?", he said, quoted from ANTARA, Saturday, October 28.

One of the reasons that makes electric vehicles still expensive, explained Yoshinki, is of course the production amount that is still much lower than conventional cars, or fuel oil.

"The following are manufacturing rules here, if you want the price to be affordable, you have to produce at large volumes, and large volumes will help us lower prices," he added.

In addition, Yoshinki said, supply chain is the key to lowering the price of an item. The locally produced rationalization of spare parts will certainly quickly turn things around.

More components or spare parts are produced locally, the cheaper the price of a product will be, considering that this process can reduce the cost of quite high logistics shipments.

"Logistical costs are very high if you have to send, say, batteries from other places, machines from other places, this will increase prices. Not to mention the import tax that must be paid, thus making the vehicle unaffordable," he said.

Furthermore, Yoshinki said, to make the price of electric cars affordable, especially Battery Electric Vehicle (BEV), at least 60 to 70 percent of the content is needed. This requires quite hard work between all stakeholders.

"This (localization) is an area where we have to really work hard," said Yoshinki.

Providing ongoing incentives from the local government is one of the crucial things in reducing prices. In addition, providing incentives can attract more people who are interested in using BEV.

Even so, Yoshinki said, the incentives provided by the government to date are quite good and benefit consumers, but these incentives are not yet continuous or sustainable.

"Many markets want to use BEV, the government provides big incentives for that, but I inform you, that it is not sustainable," Yoshinki said. "As soon as you go through a period, they will reduce or cut it (incentives)," he added.

He said this condition did not only happen to Toyota, but almost all automotive and mobility companies in the world.

"I hope that Indonesia will become the next country in terms of local production growth. I really hope so, Indonesia has all its raw materials (electric vehicles)," Yoshinki explained.