It’s expected that Electric Vehicles will reach 10% penetration of the new car buyers' market by the end of 2024.
Source: EIA
Tail Of Two Markets: The Overall EV Market and The Electric Pickup Market
Electric vehicles (EVs) have successfully won over 'Innovators,' the first 2.5% of a market, and are in process of winning over 'Early Adopters,' the next 13.5% of the adoption curve. This is an impressive feat.
The early buyers have put their trust in a new technology before the masses. They have been willing to purchase electric vehicles (EVs) before EVs have reached the much-discussed price parity point—where they cost less to purchase and operate than internal combustion engine cars.
Yet, the story shifts when focusing on the pickup truck segment, a category uniquely American and dominant in vehicle sales rankings. In 2023, the Ford F-Series (750,789 units sold), Chevy Silverado (543,319 units sold), and Dodge Ram (444,296 units sold) were the top three best-selling models in the United States.
Opportunity for Pickup Trucks To Benefit From Declining Battery Pack Costs
In 2024, the estimated combined sales of the four electric pickup trucks that are currently in production—The Chevy Silverado, Ford Lightning, Rivian R1T, and Tesla Cybertruck—will reach approximately 75,000 vehicles. This is less than 3% of the 2.8 million pickup trucks sold in the U.S. during 2023.
The pickup truck segment lags a few years behind the broader electric vehicle (EV) market. In 2019, EVs captured a 3% market share of new car purchases. However, with the recent decrease in lithium-ion battery costs, larger 200 kWh battery packs are expected to become more common in electric pickup trucks, powering electric pickups to reach 10% market share of the pickup market by 2028.
200 kWh Battery Packs Will Drive The Electric Pickup Market Forward
Reaching a 10% market share for electric pickups will require greater capacity 200 kWh battery packs. This is capacity two to three times larger than those found in smaller electric vehicles.
Large-capacity battery packs are necessary for electric pickup trucks due to the following reasons:
Convenience: Buyers of pick-up trucks prioritize quick charging due to their frequent use for work purposes.
High Power Consumption: Pick-up trucks, being heavy and power-intensive, typically achieve around 2.5 miles per kWh.
Extended-Range: Equipping a pick-up truck with a 200-kWh battery pack enables it to cover approximately 500 miles, almost double the range of competitively priced electric passenger vehicles.
Towing Requirements: Pick-up trucks experience reduced efficiency when towing, necessitating a larger battery pack to compensate for this.
Mobile Generator: Electric pickup trucks serve as mobile generators, which makes a larger battery pack advantageous for job sites and as a potential backup power source through bidirectional charging capabilities.
Market Readiness for Pick-Up Trucks With 200 kWh Battery Packs
Until recently, the cost of battery packs has been prohibitively high, making 200 kWh battery packs unaffordable for most pickup truck buyers. In 2023, the average price of a pickup truck was $60,000.
In 2023, the average cost of battery cells was $103 per kWh. It is expected that these prices will have significantly dropped to approximately $50 per kWh by the end of 2024. Typically, battery pack costs include a premium of around 30% above the cell prices. This means that a 200-kWh battery pack would be priced at approximately $26,780 in 2023.
Following the rapid reduction in battery prices, a 200-kWh sized battery pack is now projected to cost closer to $13,000, as we head into 2025. Considering that a $26,000 battery constitutes almost half (43%) of the cost of the average pickup truck, and a $13,000 battery pack amounts to less than a quarter (21%) of the cost, this is likely to speed up the transition to electric pickup trucks.
Conclusion
As the decreasing costs of battery packs settle into supply chains and production vehicles, pickup trucks with 200-kWh battery packs will be priced closer to $60,000 by 2026. In fact, we can already see the market move in this direction. The 2025 Silverado EV includes a work-trim version with a 205 kWh Battery Pack, costing $77,000.
As battery costs decrease and technology advances to lighten battery packs, it is expected that other manufacturers, including Tesla, Rivian, Ford, and others, will launch models equipped with 200-kWh battery packs. These more economical, higher-capacity battery packs are set to transform electric pickups into highly sought-after vehicles.